Business Law

Business law encompasses the state and federal laws that dictate how to start, buy, sell, manage, or close a business.  These laws dictate the rules that businesses must follow, as well as outlining the procedures under which a business must operate.  While many businesspeople are generally familiar with these laws, having an outside general counsel who knows and understands your needs and goals is critical to avoiding the risks and hazards, and allows you to focus on what you do best: managing your business affairs. 

Some of the services we can provide are:

  • Business formation and organization: Advising on entity selection for your corporations, partnerships, limited liability companies, joint ventures, and other business entities, as well as drafting operating agreements, bylaws, and procedures. 
  • Transactional business law: Drafting contracts for the purchase, sale, merger, or reorganization of all or a portion of a business; the purchase of goods or services; and employee agreements.
  • Business negotiations: Advising on structuring, negotiating, and exercising due diligence during business discussions.
  • Business planning: Key employee compensation, transitioning employees to business ownership, and business succession planning.

Do you need legal advice on starting, growing, or managing your business?  Please take advantage of our Frequently Asked Questions and Answers below and check out our Resources page.

Ready to talk now?  Contact CASHMAN LAW to set up a free consultation.

FAQS

At CASHMAN LAW we believe informed clients make the best clients.  Whether you have retained the firm or are just looking for some general information before or after your free consultation, please make use of our FAQs and other resources found on this website.

General frequently asked questions

Do I need to hire a business attorney?

Yes, and as you review these basic frequently asked questions you can see why.  A trusted legal advisor, knowledgeable about business law, can help guide you through the legal morass that often bogs down businesspeople and keeps them from doing what they do best.  Hiring legal counsel that is willing to make the effort to understand your needs and goals is a crucial step in setting your business up for success—whether that be a new venture or an existing entity.  Often businesspeople wait until they have spent valuable time and resources and perhaps started down the wrong path before they seek assistance.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

Do I need an attorney to prepare my legal documents?

The proliferation of on-line legal assistance websites has led many to attempt to engage in self-help legal services.  That is a risky venture. Even those sites that claim to offer state specific legal assistance can’t provide the specificity provided by qualified legal counsel.  As litigators, we frequently find ourselves advising clients who attempted to cut corners and failed to tailor the legal documents to their business’s needs. Attorney fees may seem a luxury to many small and medium sized business owners. The costs associated with a poorly written legal document are magnitudes greater.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

Can I start my own business without legal assistance?

You sure can. In fact, here are links to the websites for business registration in California through the Secretary of State and in Hawai’i through the Department of Commerce and Consumer Affairs. Understand that business ventures can be risky. The paperwork itself is not overly complicated for the sophisticated businessperson.  The devil is in the details.  Choosing the correct business entity, developing sound operating procedures, selecting appropriate contract terms, and understanding the potential tax consequences can result in the ultimate success or failure of your business.  At CASHMAN LAW we pride ourselves at not just practicing business law, but business litigation as well.  We are, therefore, well versed in how bad advice can go wrong for clients. 

Contact CASHMAN LAW today for a free consultation to see how we might assist.

How can you help me manage my business as it grows?

We can help you navigate through the myriad for state and federal laws that affect your business. We start with entity selection or forming and organizing a business for success.  If you are already up and running, we can discuss how well your choice of entity fits your business goals and needs, and whether it’s time or appropriate to convert to another business entity.  As you operate, we can assist with corporate maintenance; selling additional shares or expanding membership; stock option and key employee incentive plans; drafting and negotiating contracts; resolving disputes; and advising on employment issues.  As your business needs change, we can advise on buying, selling, merging, and dissolution and succession planning.  

Contact CASHMAN LAW today for a free consultation to see how we might assist.

How can a business law attorney assist me in forming a new business?

No business is one-size fits all when it comes to business law.  Depending on your resources and goals we can advise you on how to proceed with starting your business.  This typically begins with choosing the correct operating entity to minimize your liability exposure and maximize your growth potential. We will discuss your business goals and the different options for entity choice

Contact CASHMAN LAW today for a free consultation to see how we might assist.

What are Outside General Counsel services?

Many companies don’t have an internal general counsel and are not ready to invest in the cost of hiring one.  But they want a trusted legal advisor that is familiar with their legal issues and can provide needed guidance on these issues: formation and governance documents, employee issues, reviewing contracts, developing policies and procedures, and advising on how to deal with disputes. We can provide these services so you can be confident you have a legal resource when you need it.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

Formation frequently asked questions

What Organizational Structure is Best?

There are four basic business entities: a sole proprietorship, a partnership, a corporation, and a limited liability company. Each of these entities has several variations.  For example: Corporations can be classified as C or S corporations. LLCs can be member managed or manager managed. Partnerships can be general or limited. These are but a few of the many variations recognized under state law. 

There are many considerations when selecting the appropriate business entity. They are unique to you, your goals, your resources, your market, and your business plan.  Generally speaking, most business owners consider five things: 

  • Tax Consequences
  • Management structure
  • Capitalization plan
  • Liability
  • Ownership 

We can help you match your needs to the most appropriate organizational structure.  

For more information on Business Entities, click this link or visit our Resources page. 

Contact CASHMAN LAW today for a free consultation to see how we might assist.

Can forming a business protect my personal assets?

Generally, yes. The limited liability recognized by law and offered by corporations and other business entities shelters business owners from personal liability for the debt or other obligations of the business. This protection is not absolute.  If an owner, officer, or director performs certain personal acts, behaves illegally, or fails to uphold statutory requirements for corporate status, he or she may face personal liability despite the ordinary protections provided by law.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

What is a Limited Liability Company (LLC)?

A Limited Liability Company is a common choice for businesspeople who want to take advantage of the joint benefits of personal asset protection and pass-through taxation.  An LLC can be taxed like a sole proprietor, who reports gains and losses on their own personal tax returns, and not a separate business tax return.  The LLC owner(s) can also take advantage of the limited liability protection afforded by the corporate structure.  In other words, unlike a sole proprietor, an LLC owner cannot be held personally liable for the debts or wrongfully held actions of the business.  The protection is not absolute but is typically upheld if the owners adhere to the corporate formalities and the owner(s) do not commit personal acts that are negligent or illegal.

For more information on Limited Liability Companies, click this link or visit our Resources page. 

Contact CASHMAN LAW today for a free consultation to see how we might assist.

How do we form an LLC?

First we need to register your LLC in the state where you wish to do business.  After filing with the state, we will contact the IRS to obtain an Employer Identification Number (EIN). The EIN number will be needed to open a business bank account and file taxes. We will also need to contact the state’s Taxation Department to find out what tax obligations you will owe. Next, we will need to prepare an operating agreement consistent with how you wish to run the business, and draft necessary business and employee contracts. Finally, we will need to obtain the proper permits and licenses to operate your business. While not required, we also recommend interviewing an accountant to assist with record keeping and preparing tax filings. 

Contact CASHMAN LAW today for a free consultation to see how we might assist.

What is a Corporation?

A corporation is a legal entity that is separate and independent from the people who own, control, and manage it.  It is taxed separately and enters into contracts through those appointed in its corporate documents. As a separate entity, its officers and owners are sheltered from corporate liability, i.e. if the corporation incurs a judgment against itself, the personal assets of the owners are protected. 

There are two types of corporations.  Operationally, the two corporations are similar and are defined by the articles of incorporation, bylaws, and procedures adopted. The difference is how each entity is taxed. The Internal Revenue Code allows for two different levels of corporate tax treatment: S Corporations and C Corporations. C corporations include most large, publicly-held businesses. When these corporations pay dividends to their owners, they face double taxation: the corporation files their own tax returns and pays taxes on profits before paying dividends to shareholders.  The shareholders are subsequently taxed on their individual returns. 

S corporations avoid double taxation issues, but must meet certain organizational requirements. With an S corporation, all of the profits and losses of the corporation flow down to the shareholder level where the money is only taxed once. 

For more information on Corporations, visit our Resources page. 

What is a S Corporation?

S corporations enjoy special tax status, but it must have less than 100 owners and all owners must be U.S. Citizens (owners cannot be other C corporations, LLCs, certain trusts, S corporations, or partnerships).  S corporations do not have to pay taxes at the business level. Instead, taxable income is passed directly to the owners who report any business gains or losses on their personal tax returns.  This avoids the “double taxation” of C corporations which requires tax return from the business and from the owner’s dividend income derived from the business.  S corporations, similar to LLCs and C corporations, enjoy limited liability, offering protection for its owners from corporate wrongdoings. 

Not every corporation can qualify to be an S corporation. For example, the corporation must have fewer than 100 shareholders, it must only have one class of stock (i.e., you cannot have both common and preferred shares), and, generally speaking, every shareholder must be an individual or qualified trust.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

What is a C Corporation?

C corporations are a common choice for businesses that have many owners.  They also provide for business expenses to be more readily tax deductible. Like an S corporation or LLC, a C corporation offers its owners limited liability. Unlike S corporations, C corporations can also have an unlimited number and type of owners, and therefore can usually raise capital more easily. Also unlike S corporations, C corporations may be subject to “double taxation”: corporate tax filed on a separate tax return and a tax on owner’s income derived from dividends.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

How do I form a Corporation?

If you read the FAQ on forming an LLC, the steps are similar for forming a corporation, whether it be a C corporation or an S corporation.  First, we need to register your Corporation in the state in which you wish to do business.  Next, we will need to prepare an operating agreement and bylaws consistent with how you wish to run the business.  Those documents will establish a board of directors who may then hold an initial meeting and issue stock certificates to the owners.  We will draft necessary business and employee contracts.  We will contact the IRS to obtain an Employer Identification Number (EIN to open a business bank account and file taxes).  We will also need to contact the state’s Taxation Department to find out what tax obligations you will incur.  Finally, we will need to obtain the proper permits and licenses to operate your business.  While not required, we also recommend interviewing an accountant to assist with record keeping and preparing tax filings.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

What is a Partnership?

A partnership consists of two or more persons engaged in a business for profit. Except as otherwise provided by law or the partnership agreement, all partners are liable jointly and severally for all obligations of the partnership. Profits are taxed as personal income for the partners.  For tax purposes, each partner reports their share of the partnership’s income, deductions, credits, property, payroll, and sales.

Like LLCs and corporations, partnerships come in different variations and are best suited for different business arrangements: general partnerships, limited partnerships, limited liability partnerships.  

Contact CASHMAN LAW today for a free consultation to see how we might assist.

What is a Limited Liability Partnership?

A Limited Liability Partnership (LLP) is another common choice for legal entities who want to limit their personal liability. Unlike a general partnership, in which the partners have unlimited personal liability for the debts and obligations of the partnership, a Limited Liability Partnership does what the name implies, limits a partner’s liability for the misconduct or negligence of another partner. LLPs are a frequent choice for professional groups.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

How to we form a Partnership?

As was the case with an LLC or Corporation, our first step is to register in the state in which you wish to do business.  After filing with the state, we will contact the IRS to obtain an Employer Identification Number (EIN). The EIN number will be needed to open a business bank account and file taxes. We will also need to contact the state’s Taxation Department to find out what tax obligations you will incur. Next, we will need to prepare a partnership agreement consistent with how you wish to run the business, and draft necessary business and employee contracts. Finally, we will need to obtain the proper permits and licenses to operate your business. While not required, we also recommend interviewing an accountant to assist with record keeping and preparing tax filings.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

What is a joint venture?

A joint venture is a contractual relationship undertaken by two or more parties which otherwise retain their distinct identities. Typically, a joint venture is formed for the purpose of combining resources on a project or service.  In creating a joint venture, care should be taken to define each party’s duties and responsibilities, as well as how to allocate profits, losses, and costs. 

Contact CASHMAN LAW today for a free consultation to see how we might assist.

What is a statutory agent?

State law, including the states of California and Hawai’i requires businesses to designate an agent to receive service of any legal actions.  More commonly referred to as a registered agent or agent for service of process, this agent would receive notification when another business or person commences legal proceedings.  Your agent can be an officer of the entity, if that officer resides in the state, or another entity or individual designated to receive service.  Often companies will ask their legal counsel to serve as their registered agent so that they are immediately aware of any legal actions.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

How do I obtain a Tax or Employer Identification Number (EIN)?

Your Employer Identification Number (EIN) is issued by the IRS and can be obtained easily at the IRS website

Contact CASHMAN LAW today for a free consultation to see how we might assist.

What is a Buy-Sell Agreement, and do I need one?

A buy-sell agreement is one of the many documents we recommend creating in conjunction with any business entity with more than one owner. If an owner dies, divorces, becomes disabled, or is removed from employment, the business needs to be adequately prepared on how to handle it.  Such agreements can also contain provisions to help limit who may become an owner of the business. In the absence of such an agreement, business owners are forced to fall back on the default provisions of their respective state’s business statutes, which may not be favorable. 

Contact CASHMAN LAW today for a free consultation to see how we might assist.

Will forming the proper business entity really protect my personal assets from business debts?

Yes, it can.  State law will govern, but you will need to follow a few simple rules:

  • Form the entity fully and completely (this means issuing stock for consideration, electing directors, appointing officers, adopting bylaws and filing all required state and federal forms).
  • Adequately capitalize the business at its inception.
  • Follow corporate formalities (i.e., holding corporate meetings and documenting those meetings with written minutes.)
  • Do not commingle personal assets with business assets: keep separate bank accounts and do not pay personal expenses out of the corporate bank account.
  • Do not sign any personal guarantees.
  • Do not engage in any criminal activity or intentional torts. The corporate structure will not protect you from an intentional conduct.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

What does it mean to “pierce the corporate veil”?

If you have reviewed some of the previous FAQs discussing entity types, you have seen references to limiting personal liability.  “Piercing the corporate veil” is a legal theory where a wronged party attempts to hold a business owner, officer, or director personally liable for the business’s faults.  If an organization fails to maintain separation from those who control it, the theory allows a wronged party to “pierce” through the corporate structure and reach the personal assets of those individuals.  Whether you are a new business owner, or have been conducting business for some time, it is important to discuss how your state views this separation and what specific things you can do to make sure your personal assets won’t be reached. If you are starting your business, its best to have this discussion upfront as you plan and create your operating documents.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

How do I get funding to start my small business?

Typically, businesses seek funding from a handful of different financing sources: traditional financial institutions, government loans, angel investors, friends and family, peer to peer, venture capitalists, and self-finance. Whether you are a new start-up, or a growing business, if you are seeking funding from outside sources, or even from family and friends, its best to have a well thought out and detailed business plan.  Let us help you put together that plan.  

Contact CASHMAN LAW today for a free consultation to see how we might assist.

What is a vesting schedule?

Whether you are a start-up or a business looking to expand, you want to attract the best talent to your team.  Except you may not have the capital resources to do that. One solution is to offer co-founders or key employees business ownership.  But then after six months you may have a falling out or a disagreement on direction and this trusted individual walks away with a significant ownership stake in the enterprise.  Hence, vesting schedules.  Vesting schedules are useful tools to provide ownership incentive in return for company loyalty.  These individuals would receive company ownership overtime (typically four years, on a yearly or monthly basis) and provides for a repurchase agreement in the event they leave, either voluntarily or involuntarily.   

Contact CASHMAN LAW today for a free consultation to see how we might assist.

Operation frequently asked questions

We started a business without consulting an attorney, can you help?

Yes.  If you started a business without the benefit of counsel, or perhaps less counsel then you now realize you needed, there are a few key legal documents we can assist with.  First, we will want to review your operating agreement and bylaws, if you have any.  If you don’t, we’ll create some for you, consistent with how you wish to conduct business.  Next we may make changes to those documents, or draft a memorandum of understanding between the business owners that specifies the parties’ obligations and ownership stakes in writing.  Next we can look at your existing contracts, and see if any changes are needed or if a more standard contract will assist you in being more efficient in the future.  Finally, we will discuss your future business plans and project how we might assist in the future.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

What is a non-compete agreement and is it enforceable?

Maybe, maybe not.  State law governs the enforceability of non-compete clauses; what might be acceptable in one state could be treated very differently in another.  If you already have a contract that includes a non-compete clause, non-solicitation clause, or a non-disclosure clause, or are contemplating adding these to a current contract, best to check with a business law attorney who is familiar with the particular verbiage, structure, and limitations that are required by your state.  

Some considerations in drafting these agreements are whether they are included in an employment agreement or in conjunction with the sale of a business.  It’s also important whether they are protecting company trade secrets, customer contacts, and confidential information, or whether they seek to restrict future employment or business. If not worded correctly for your particular situation, such agreements may not be enforceable and a business can risk forfeiting valuable business information and rights.  

Contact CASHMAN LAW today for a free consultation to see how we might assist.

Should I have employment contracts for my employees?

Most employment relationships in the U.S. are at will, which allows either the employer or the employee to end the relationship at any time and for any reason. To avoid confusion on this right, you should avoid promising job security to a prospective or new employee. If, however, you are trying to attract high quality talent to your business, an employment contract can be a great tool.  

While written employment contracts are not required, they are universally used when hiring for a high-level or essential position. For new business owners, or for new positions, it also forces you to engage in the thoughtful process of determining what that person’s duties and responsibilities will be, in addition to the salary and any other compensation or benefits. You may want to include an ownership incentive plan, non-compete clauses for after they leave your business, grounds for termination, a provision about trade secrets or client lists, an employer’s ownership of employee work product, and a method of dispute resolution related to the employment contract. The process of hiring employees can be filled with pitfalls for a business owner if they do not understand their obligations under the law, or more importantly how a well-written contract can help further the business goals.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

Can I conduct my business entirely online?

Businesses without physical office space are increasingly popular.  There is no requirement under state or federal law that your office must have a physical location devoted solely to business matters. However, when registering your business, you will be required to provide a business address.  You cannot start a business without determining where you can receive mail and correspondence about your business, and a location from which you will pay taxes.  This location could be your home address or another location, but it is important for determining state and local tax compliance and business registration.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

What are some legal concerns about paying employees?

You will need a federal Employer Identification Number, and any state or local tax IDs that may be needed depending on the type and location of your business.  As you hire employees you will need a payroll play.  You need to schedule the pay periods for employees, and design a plan that provides for holidays, vacation time, and other forms of leave.  You may choose to do this internally or with the assistance of an outside provider.  Whoever manages your payroll system must have a clear understanding of the record keeping protocols.  Finally, you will need to report payroll taxes on a quarterly and annual basis to comply with federal tax requirements and new employees must return a completed W-4 form.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

What is the difference between an independent contractor and an employee?

Whether someone who works for your business as an employee or an independent contractor can have a huge impact on the tax and tort liability of your business.  Employees also have certain rights that independent contractors do not, such as the right to a minimum wage and benefits.  Failing to classify an individual as an employee may result in significant financial consequences, including paying back wages, back taxes, and penalties.  Also, a business may be found liable for a tort claim if an act is committed by the business’s employee through a legal theory called vicarious liability.  This theory of recovery is not likely to be applied successfully for an act done by an independent contractor. 

The law is frequently in flux on what determines the difference between an independent contractor and an employee.  Generally speaking, the difference is that an employee is hired to provide work on a regular basis and is subject to the control of the employer, while an independent contractor is someone who contracts to provide specific work to a company according to the contract and is not subject to the same level of control as an employee.  The distinction between an employee and an independent contractor is fact-specific.  An independent contractor has their own business and simply bills your business for work that they do for you.  They usually use their own materials and control the way in which they complete the work.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

How do I create a positive work climate for my company?

A good starting point for a healthy work environment is compliance with federal, state, and local laws addressing anti-discrimination.   While much of the spirit and letter of these laws is common sense, well-intentioned business owners can inadvertently step outside the lines.  For example, in an effort to find out an employee’s work availability, you might think to inquire about marital status or if they have children.  This question would be illegal. 

As you begin your interview process, we can assist in reviewing with you the “do’s and don’ts” of interview questions.  Some significant federal anti-discrimination laws include the Civil Rights Act of 1964 (Title VII), the Age Discrimination in Employment Act of 1967 (ADEA), the Equal Pay Act of 1963, the Employee Retirement Income Security Act of 1974 (ERISA), the Pregnancy Discrimination Act of 1978, the Family and Medical Leave Act of 1993 (FMLA), the Immigration Reform and Control Act of 1986, and the Americans with Disabilities Act of 1990 (ADA).  The ADA and ADEA require employers to give due consideration to older employee applicants and disabled employees, including making reasonable accommodations.  The Equal Pay Act prohibits gender discrimination in pay structures.  Title VII prohibits employers from discriminating against employees on the basis of race, color, national origin, religion, or gender.  The Pregnancy Discrimination Act prohibits discrimination on the basis of pregnancy.  The FMLA provides for leave from work under certain circumstances. ERISA provides guidance to employers when providing benefit plans, health insurance, or retirement plans to employees.  State and local laws may provide additional guidance and protection on a broader range of topics than federal law.  Such laws provide guidance not just in the hiring process, but for working employees, and in the event you need to terminate an employee.  

Employment litigation, as is the case with all litigation, can be a costly and an unwanted distraction from carrying on your business.  Being knowable about compliance with labor and employment laws provides not just a healthy return on your time investment, but is good business.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

What kind of benefits should I offer my employees?

Every business owner wants to attract the best talent at an attractive compensation level.  A good starting point is to become familiar with the legally mandated benefits of all employees.  Federal law requires that employers offer certain types of benefits to employees. These include unemployment insurance, worker’s compensation, social security taxes, leave benefits, and disability pay required under California and Hawai’i state law. 

From that starting point, offering the highest base salary may not be in your business’s or your employee’s best interests. Because of tax savings and economies of scale, other types of compensation may be more beneficial for you both. For example, you may also want to include 401k’s, pension plans, and group health care plans as compensation incentives.  As you select these plans, you need to ensure they follow federal laws. 

Other types of benefits you can consider include flexible work schedules, stock options, and company-paid recreational activities.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

What are some of my employees’ privacy rights?

Your employees have some privacy rights.  They are not as great as they have in their own homes, but they do exist.  Setting clear expectation as to what these rights involve provides for a healthy work environment and minimizes disruptions. There are numerous federal and local laws that involve the employer/employee relationship with respect to privacy: termination, discrimination, workplace safety, taxation, wages, to name but a few.  Many employees have certain expectations of privacy at the workplace due to passwords and electronic mailboxes, but these subjective expectations do not often match the objective expectations recognized under the law.  An employer’s best policy is to create written policy guidance to make things clear.  Some helpful tips as you create your written policies: 

  • Generally, private companies have the right to monitor the email, computer, and phones of their employees. 
  • Generally private companies have the right to monitor (by video, but not audio) their employees by camera, including parking areas for security and safety. This also includes limited use in the workplace to monitor productivity or deter theft. 
  • Private companies have certain rights regarding drug testing of employees. 
  • Private company employees have certain privacy rights with respect to personal items including handbags, briefcases, storage lockers, and private emails which are only accessible by the employee.  
  • State laws vary on the ability of private companies to track employees using GPS. 
  • Employers should obtain a candidate’s consent before conducting a background check in the hiring process. 

These are but a few of the legal areas that employers should be knowledgeable about in the hiring, employment, and termination processes. If your business does not have a written privacy policy, let us help you create one that meets your individual business’s needs.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

Should I hire an attorney to review my contracts?

Yes, you really should.  Contracts create legal obligations, and ambiguous or poorly written contracts can create unknown risks that puts your company in jeopardy.  Our Firm’s goal is to create value in every transaction at minimal cost to our clients. Often that involves creating some standard contracts for you based upon your specific business goal and needs.  After that, we ask to be a part of the discussion on future contacts to make sure no changes in law will affect the current contract terms, or if certain modifications are in order due to the specifics of the deal.  Whether that be contracts for goods or services, or employment contracts, business leases, or real property purchases, let us help you minimize risks and maximize your value.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

Am I required to pay my employees overtime?

You may be.  Federal and state wage and hour laws and local ordinances protect employees from unjust compensation. Employers are required to pay employees at least minimum wage, which is set by both federal and state laws.  Failure to pay this amount, failure to pay overtime when justified, or taking punitive measure when an employee asserts these rights can run you afoul of the law.    

Contact CASHMAN LAW today for a free consultation to see how we might assist.

How to I prevent employee retaliation lawsuits?

The first step is understanding the law. Retaliation occurs when an employer punishes an employee for engaging in a legally protected activity. Certain federal and state laws provide guidance to employers to prevent this activity. Some of the more common federal laws providing protection for retaliation include the Americans with Disabilities Act (ADA), Title VII, and the Equal Pay Act.  

Contact CASHMAN LAW today for a free consultation to see how we might assist.

What are some of the on-going legal compliance issues of running a business?

After forming your business, certain legal compliance issues remain.  Generally speaking, you need to file appropriate taxes, and maintain your license and registrations with the applicable local and federal agencies. These requirements vary depending on the type of entity you have formed. On a sliding scale, corporations and LLCs are subject to stricter requirements than partnerships and sole proprietorships. Depending on the type of business, you may need to maintain certain federal and state licenses and permits in order to operate. Occasionally, a change to your business or to existing law may require your getting a new license or permit. 

Contact CASHMAN LAW today for a free consultation to see how we might assist.

Purchase or Sale frequently asked questions

What are some considerations in buying or selling a business?

First, no matter how amicable your relationship with the other person or parties, it’s wise to invest in your own legal counsel.  Reliance on a business broker or an attorney chosen by a business broker to represent both the buyer and the seller is a recipe for unhappy times. As a litigator, I have been involved in too many cases where the sale of a business has gone badly because the buyer and seller were encouraged to use the same “closing attorney.” 

There are many thrifty law firms that are willing to pump out a closing and take the risk that they will be charged with conflict of interest by failing to adequately represent both sides to a deal.  This is not one of those firms.  

If you chose to go that route, be careful to include adequate protections in the form of non-compete agreements, forum selection clauses, choice of law provisions, due diligence for payments, licensing, and asset transfers, as well as the tax implications. 

Contact CASHMAN LAW today for a free consultation to see how we might assist.

I am unable to continue with my business, what are my options?

Every business owner should have an exit strategy should the need arise.  If your business is struggling and you are accumulating debt, bankruptcy may be your only option.  You may, however, be able to sell a struggling business to someone who feels that they can turn it around. By being candid in your negotiations and intent, we can fashion a sale agreement that transfers all of the assets and liabilities of the business so that both sides understand their obligations. Alternatively, we may be able to negotiate an agreement with your creditors that allows you to avoid bankruptcy, while paying off part of what you owe and closing the business.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

I am thinking of merging my company, what do I need to know?

With a few exceptions, like anti-trust laws, most mergers are governed and regulated by state law. Depending on the type of entity, the requirements differ.  Generally, the owners (or the board of directors) for each entity must initially approve a resolution adopting a plan of merger.  That resolution would include a number of provisions, including the resulting ownership of the new or surviving entity.  The parties would then file the necessary documents with the state government, which would issue a certificate of merger to authorize the new entity.

Contact CASHMAN LAW today for a free consultation to see how we might assist.

I am ready to transition out of all or part of my business, what do I do?

Your first step is to look at your operating agreement and/or bylaws. Well-drafted legal formation documents will provide some guidance on how to transition. In the absence of this, we will look to state law. Under state law, the transferability of ownership interest differs among entity types. 

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How do I dissolve a business entity?

The rules for dissolving a business entity are governed by the state law of its formation, and may be modified by the formation documents.  Generally speaking, to voluntarily dissolve you first need adequate approval of the owners. Then, you need to give notice to all creditors (or potential creditors) and to any owners that did not vote in favor of the pending dissolution. Finally, once the business is wound up, debts are provided for, and assets are distributed, the corporation will need to file the applicable dissolution documents with the applicable state agency.

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Succession Planning frequently asked questions

What happens to my business when I pass?

Well, hopefully we will have talked before then and can advise you on a business succession plan that suits your needs. In the absence of such a plan, your business is likely to pass through probate court with the rest of your individually titled assets.  It will go through a liquidation process, where debts are paid and assets are sold. Eventually the remainder will be distributed to your beneficiaries.  This can be a lengthy and costly process.  

Ideally, we can discuss a business succession plan that provides for ownership when you pass.  One common method is to place the business in a trust as part of your estate plan.  That will allow the business to carry on, or you can provide instructions on how to wind down the business and distribute its assets, or to sell it in its entirety.  Alternatively, or in conjunction with that plan, we can provide terms in your businesses operating agreement or bylaws that allow the sale to certain individuals. 

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I have a family owned business, what are some things to consider in my succession plan?

Family business succession can be difficult to navigate if you don’t have a plan in place. No two are the same.  Not infrequently, family members do not really get along, or perhaps don’t agree on how the business should be handled.  This can create unnecessary strain at a time when emotions are already running high. 

Family business succession planning is often best viewed in terms of the total estate and the total estate plan. It’s important to understand how a particular family business functions and operates, and how the family itself functions when it comes to financial matters. Some things to consider when devising your succession plan are:  who will administer the business when you pass; whether the successor(s) should wind down the business or continue it; what the assets are that the business owns; and how and to whom you want your wealth distributed.

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How do I make sure my business will continue and support my family when I die?

That may not be possible, but the first step in giving you the best chance for success is to create a business succession plan with the proper legal documents, including a Will and possibly a Trust. We should also create detailed instructions for its succession, provide accesses to confidential information, and have the cooperation of someone who will step into your shoes.   A liquidation plan is also an option. Whatever plan you choose; we generally recommend adequate insurance.

Contact CASHMAN LAW today for a free consultation to see how we might assist.