I recently was asked to review a business for the purpose of either getting out of their franchise or negotiating with the franchisor about a possible modification to the business.
As Momma used to say “get your money up front!”
A client had purchased a restaurant by buying the LLC from the previous owner. Well, most of it, anyway. For some reason, the client only purchased 95% of the outstanding membership interests of the LLC, not the whole 100%. I’m still not certain what the rationale behind that was. What I am certain about is that this deal was a train wreck, and the client is doing everything in their power to make it worse.
If you are going to buy an existing business, your due diligence should include review of ALL pertinent documents, including:
- franchise agreement
- vendor contracts
- tax returns
- bank statements
- financial statements
It is always safer for a business purchaser to buy the assets of a pre-existing business rather than the stock or membership interests of the company, so that there are no hidden surprises. However, that may not always be possible.
If you are faced with purchasing an existing business, be certain that you have the appropriate professional review documents and financials before you sign the purchase agreement, whether the professional is a lawyer, qualified business intermediary or accountant. The fortune you save just might be yours.
I’ve been invited to speak on Issuing, Dividing and Transferring LLC Member Interests at the 2018 Alabama Business Law Conference. The event will be held on October 26, 2018 in Birmingham.
I attended this Conference for the first time last year and find it to be very informative with a wide range of excellent speakers. I plan on putting this on my CLE Schedule as often as possible.
Stay tuned for updated information on this Conference as it becomes available.
Smart business owners know when to ask for help. Proud business owners go out of business.
I have a client that sent a detailed email about spinning out a portion of their assets to an employee, who would set up his own company to contract with not only their former boss, but some of the competition too.
Previously, I would get a two minute phone call asking me to do something that was completely vague and would lead to a series of calls to their bookkeeper or accountant over a few week period that would finally result in whatever it was.
This time the email was direct and on point, with almost all of the information that would be necessary to complete the task. Being curious I called and found out that they had reached out to a business consultant that had come in and restructured the business in a direct, no-nonsense and reasonable way. Hopefully profitable as well.
From time to time, most folks could use a little advice. Don’t let pride get in the way of being a success!
If you’d like help with your business, please call The Corrigan Law Firm PC at (251) 476-2292.
We have some remarkable artists, authors and songwriters in our area. One recently asked me to help her through the process of copyrighting her work.
It is a very simple process, really. A visit to the United States Copyright Office website, http://www.copyright.gov and it’s a pretty straightforward process.
Same goes for protecting other intellectual property. Copyrights, trademarks, service marks, trade names. All have value. They have even more value to the people that work hard to establish a brand or a mark. Don’t let someone come along and take what you’ve earned.
Likewise, you can’t just toss a registration on someone else’s intellectual property. Trademarks aren’t just registered, they have to be used and earned to establish your ownership of the mark. I know some folks from Illinois that wish they hadn’t tried that little trick. Cost them $525,000. Juries don’t like people that steal someone’s hard earned brand.
Nevertheless, if you need assistance, I will be more than happy to help. You may contact me at email@example.com, or simply call the office at 251-476-2292 for further information.