Forming a Business with Friends

If you are looking to sell your business it’s important to have trusted attorneys by your side. You've invested considerable money, time, and effort into building and growing your business, so while selling it might be emotional, a good attorney can help to make the transaction smooth and successful. Hiring an attorney can alleviate the stress of dealing with uncertainties and significantly reduce your risk of financial liability, even after the sale is finalized. Let’s take a look at how business attorneys help assist their clients in the sale of a business. As a business owner, your focus is rightfully dedicated to the details that make your company successful, but there are many complex steps to selling a business that require specific knowledge and careful planning. A mergers & acquisitions attorney understands the business sale process thoroughly. They will guide you through each stage of the process, ensuring you are advised of potential threats, presented with strategic advantages, and prepared to handle the transaction efficiently and effectively. A good attorney doesn’t simply draft documents, they can help you improve the structure of the transaction itself. From optimizing the tax impact to the owners, to limiting your financial liability post-closing, good legal representation can help you earn, and keep, the highest return on your years of hard work. Selling a business is almost never a handshake deal or an as-is sale, and if you don’t have a full understanding of the multitude of promises implied by the sale of a business, you could find yourself liable for broken promises you didn’t even know you made. In structuring a sale transaction, a good attorney can help you determine the most mutually beneficial way to receive the fair value of your business. With creative planning of the payment mechanics, you can increase your ultimate payout, limit costly contingencies, and even plan for unknown elements of future-value, enabling you to receive fair compensation for difficult-to-value aspects of your business. When it comes time to draft the documents, an attorney can help you negotiate the terms, and create a contract that is clear, thorough, and easy to understand. A professionally-drafted transaction agreement not only aids in achieving your goals and objectives, it protects the parties by establishing clear expectations, deliverables, and timelines. This helps to ensure there are no surprises or misunderstandings, paving the way to a smooth and amicable closing. In addition to the documentation between the Seller and Buyer, third-parties are often heavily involved in the sale of a business. In many cases a successful sale requires the involvement of a landlord, government agencies, banks, franchisors, or other service providers like vendors or licensors. If any of these important relations of the business are forgotten or left behind, the liability for any related losses usually falls on the Seller. Good legal representation is critical to keep track of all the details to ensure that nothing, and nobody, slips through the cracks. On Closing Day, an experienced attorney can mean the difference between an exciting day worthy of celebration, or a day full of unwelcome surprises and stressful emotions. By the time the closing arrives, the Buyer and Seller have worked collaboratively, often for months, to create a profitable opportunity for the Buyer and a lucrative exit for the Seller. Missteps at this point can create mistrust, disappointment, and feelings of betrayal, all which can detriment, or destroy, the post-closing relationship. With the help of an attorney, you can rest assured that the Closing will go off without a hitch, and that your hard work getting to the finish line is rewarded. Finally, a good lawyer can make sure your post-closing obligations are fair and don’t overly impact your post-closing plans. It is common for the Seller to make non-competition promises, or to agree to assist the Buyer with training. However, treating these important obligations as afterthoughts can lead to frustration and litigation, creating costly losses and souring the experience. Careful planning with your objectives in mind can ensure that the process after the Closing is as smooth as the transaction before it. A good attorney doesn’t stop looking out for you once pen is put to paper, they will continue to protect your interests until all the dust has settled, and long after. Whether you're experienced in selling a business or not, having an attorney's support is invaluable. They will ensure nothing is missed during the sale, giving you confidence and peace of mind. With your interests safeguarded, you can move on to your next chapter with success. If you're thinking about selling your business, reach out to us today. We're passionate about helping business owners sell and make successful transitions.

As society’s reliance upon information technology and the service economy continues to expand, businesses increasingly depend on innovative ideas to achieve brand differentiation in the marketplace. The development of intellectual property gives companies a competitive edge over their counterparts. When properly protected and deployed, intellectual property can become the most valuable asset in a Company’s possession, underscoring the importance of understanding the various forms of IP protection available. Safeguarding your company's IP enables optimal asset utilization with minimal risks. The name of your business, along with its products, services, and other technical and creative works, is typically protected by one or more forms of intellectual property. Let's explore the most prevalent methods to shield your intellectual property against competitive usage from individuals within, outside, and affiliated with your company. Trademarks provide protection for brand names, service marks, phrases, and logos that differentiate goods and services. The United States Patent and Trademark Office (USPTO) manages the trademark application procedure. For business owners aiming for exclusive rights to their business name or logo, federal trademark registration with the USPTO is crucial. With a registered trademark for your brand name or logo, only your company is authorized to use that specific brand name or logo on its products or in connection with its services. There are different types of trademarks with varying levels of protection, so it’s important to understand which is right for your business. Once obtained, trademark rights must also be enforced and maintained, so full protection of your brand identity can require your ongoing attention. Copyrights protect original creative works. These protected works encompass literature, visual art, music, and audio recordings, to name a few, with a copyright serving as a deterrent against unauthorized reproduction. Federal copyrights are conferred by the U.S. Copyright Office, which manages copyright registration and addresses cases of copyright infringement. The owner of a copyright has the exclusive right to use or monetize the copyrighted-work, and can therefore generate value from the copyrighted-work immediately and long into the future. Recently, country music star Luke Combs covered the song “Fast Car” originally by Tracy Chapman, and because Tracy Chapman holds the copyright to the song, she profited along with Luke Combs when the song became a huge hit. In addition to registered intellectual property, certain intellectual property can be protected by contracts. Licensing agreements are legal contracts established between an owner of intellectual property, and an intermediary, customer, or end-user. Such agreements involve the owner of the IP, known as the licensor, granting the licensee permission to use their intellectual property, subject to conditions set forth in the licensing agreement. Rather than granting joint ownership rights, licensing agreements allow the owner of intellectual property to share the burden of commercializing the IP, while still retaining complete ownership. While most people are familiar with “End User Licensing Agreements” in software, many people do not realize that even small companies can take advantage of licensing agreements. Anytime you see an “authorized retailer” of a product, that retailer is licensing the right to sell a manufacturer’s product, usually on the condition that they present and market the product in a professional and flattering manner.  Proprietary Information and Inventions Assignment Agreements (PIIAAs) are contractual arrangements that grant the employer specific rights to information developed or inventions conceived by an employee during the course of their employment. Typically, this agreement requires an employee to disclose any such inventions to the employer, transfer ownership rights (via legal assignment) of such inventions to the employer, and assist the employer in obtaining patents or other IP protection for these inventions. These agreements are critical because, by default, an invention belongs to the inventor. Without PIIAAs, companies that try to sell or commercialize IP developed by an employee might find out that they don’t actually own the IP, and therefore don’t have the right to sell it. Even worse, they might realize that their critical IP walked out the door with a former employee. For that reason, PIIAAs are critical to any company that is in the business of developing intellectual property. Finally, even amorphous “know-how” can be protected under the law of Trade Secrets. If your company has a unique way of doing things, a certain je ne sais quoi that makes you different, even that can be protected and in some cases, monetized. With the right procedures in place to establish a Trade Secret, and protect it, you can turn your secret sauce into a marketable product. In today's landscape, safeguarding intellectual property through legal means is more crucial than ever. This process transforms a company's intangible assets into exclusive rights, preventing competitors from capitalizing on their innovations. It provides the property owner with the chance to showcase their creations with minimal competition while safeguarding the company's unique selling points. Intellectual property rights can serve as highly valuable negotiating assets and can be traded for financial gain. Protecting intellectual property enhances the value of a company's assets and augments future productivity. Investors and potential acquirers frequently regard the intellectual property portfolio of a startup as a crucial factor in their decision-making process. It significantly contributes to the overall value of a startup. Engaging a business attorney is essential for determining the optimal strategy to safeguard your company's intellectual property. If intellectual property plays a pivotal role in your business model and competitive edge, seeking legal assistance for IP applications is crucial. Failing to protect your IP can lead to costly infringement issues that could easily be avoided. Contact Troxel Fitch today to see how we can help keep your most valuable assets protected.

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How do you know if you have an employee or independent contractor on your team?

There is a huge shift that is taking place in the small business world and our economy. Baby Boomer business owners are retiring at record numbers. About 60% of them have no exit plan from their business and need to transfer their company into good hands. This is presenting a golden opportunity for entrepreneurs. If you’ve ever thought about having your own business, now is a great time to look into purchasing one from a Baby Boomer.

Whether you’re new to business or a seasoned entrepreneur, you might have a basic understanding of what an operating agreement is. Today we are going to explain just how an operating agreement protects you and your business and the importance of having one in place for the success of your company. Let’s start by reviewing what an operating agreement is. An operating agreement is a written document used by LLCs to outline the rules and regulations of the business. Its purpose is to govern the decisions that are made for the business, the relations between its members, and provisions for internal operations. Once this document is signed by the company’s members it is an official contract binding them to its terms. There are many reasons to have an operating agreement but today we are going to focus on three ways this agreement protects the business and its members. First and foremost, the operating agreement is a legally binding written contract that all members agree to. This is useful for many reasons. First, it helps to avoid misunderstandings or miscommunications among members. When there is a disagreement, and emotions are high, it is best to be able to reference a document that was written and agreed upon prior to help sort out the conflict. An agreement with written decisions and rules helps to clear up the situation quickly and efficiently. Having a description on how disagreements will be handled provides clarity and confidence on how to move forward. The guidelines in an operating agreement are also extremely helpful when there is an impactful change happening to one of its members such as death, divorce or becoming disabled. It is extremely important to be able to reference clear guidelines on how to handle these types of situations. Next, an operating agreement helps to protect the limited liability status of the business. This means that its members will not be personally liable for the acts of the LLC. One of the main reasons business owners register as a limited liability company is to avoid being personally liable for lawsuits against their company. If the members do not have an operating agreement in place they could remain personally liable to lawsuits that result from business activities. When an operating agreement is in place the court of law is more likely to keep the limited liability protection in place because the business and its members are separate and distinct. Finally, an operating agreement protects your business from inadvertently being governed by statute. When an LLC does not have a written operating agreement, the rules of how the business operates default to the state’s governing rules. Having an operating agreement written by a lawyer specific to your business needs will allow you to avoid default rules being applied to your company. This could be extremely beneficial for the business and its members so that all parties agree on how the business will operate. In the absence of an operating agreement, you are risking disagreement amongst members, litigation, loss of money and time, and potentially the business as a whole. Ensuring that you have a properly drafted operating agreement can be extremely beneficial for avoiding the stress that litigation can bring. Even when you believe you have a handle on the way the business will operate and how members will interact with the business, it's important to have a written agreement to back up those ideas in times of turmoil. We never want to think about the complications that come with running a business but it is important not to turn a blind eye to the most visible risks. While you can find simple operating agreements online, it is always best to consult with a business attorney to understand the unique needs of your business and make sure those needs are addressed in the agreement. Having a good understanding of the potential legal issues your business might face will ensure that the operating agreement adequately protects against those situations. If you have an agreement that is not clearly written or understood you could potentially spend more in lawyer fees down the line. Getting this agreement right from the start is the best option to avoiding risks.

Restrictive Employment Agreements Act (HB 22-1317)

Welcome! Today, we are bringing you the projection of this year’s technology. The research of the newest trends included here will expand you and your colleagues' technological knowledge. After reading, we hope you will have gained valuable insight on how to lead your company towards the most cutting edge year yet!