How an Attorney Can Help With Your Small Business

October 17, 2014,

Deciding to start a small business can be both exciting and stressful, and seeing your business succeed can be highly rewarding.

The reality of starting a small business is, however, that forming and running a business is generally far from a simple task. Business owners must have a viable idea, the necessary supplies to bring that idea to fruition, and a client base to keep the business afloat. Furthermore, small business owners in California must always ensure that they are in full compliance with numerous federal and state laws and regulations. This can be particularly daunting as many entrepreneurs may be largely unacquainted with all of the applicable laws, and may not have the time or expertise to familiarize themselves with such regulations.
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If you are a small business owner, a California business attorney can advise you on all the essential steps you must take in order to comply with all necessary laws.

A business attorney can make sure you remain in compliance throughout all of the stages of your business, whether you are forming your business, or ready to dissolve your business and move onto a new venture. A lawyer can answer your questions and assist you in the following matters and more:

• Choosing the best business entity for you
• Legal formation of your business
• Drafting articles of incorporation
• Drafting operating agreements and bylaws
• Drafting buy-sell agreements
• Securing all necessary licenses
• Applying for and receiving all necessary permits for your business
• California Secretary of State filings
• Lease agreements
• Protecting your intellectual property
• Drafting employee contracts
• Complying with all employment laws
• Business transactions and contract review
• Contract dispute resolution
• Collection efforts
• Restructuring after bankruptcy
• Resolving partnership disputes
• Dissolution requirements

As a small business owner, you will face many legal decisions and issues on an ongoing basis.

If you make the wrong decision or fail to comply with a federal, state, or local law, you may find yourself facing expensive penalties, sanctions, or even watching your business get shut down. A quality small business attorney will be able to assist you with legal matters from the start to finish of your business tenure. A lawyer will also stay familiar with any changes in relevant business laws and can advise you on any necessary actions in response to these changes.

Contact Structure Law Group for help with your small business.
Staying up to date on all laws relevant to small businesses can be time-consuming and leaving such matters to a business attorney allows you to focus on what is most important--day-to-day operations, growing your business, and achieving your goals. Whether you have a sole proprietorship, partnership, limited liability company (LLC), corporation, or other type of small business, the dedicated lawyers at the Structure Law Group in San Jose, California can help you. Please do not hesitate to call us today at (408) 441-7500 for assistance today.

About Structure Law Group
Structure Law Group is a San Jose based firm that specializes in business issues including business formations, commercial contracts and litigation.


5 Common Legal Mistakes Business Owners Make

October 10, 2014,

As much as you may want to avoid litigation when it comes to your business, conflicts arise and are sometimes unavoidable as a cost of running a successful business. While you and your business partners may have other philosophies on handling workplace issues, sometimes litigation is the best course of action to deal with messy company separations, distribution of assets, protecting your property, and sometimes even handling suppliers and consumers.
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As a business owner involved in litigation, you don't need to resort to spending years in litigation or paying unreasonable settlement sums; you need to build strategies with a business lawyer so you can resolve conflicts efficiently and effectively, and maximize your ability to avoid future disputes. When litigation is initiated, it is important that it is done right to avoid unnecessary mistakes that waste all parties' time and money.

Here are 5 common legal mistakes business owners can make when stepping into legal territory, and how to avoid them.

1. Not Taking the Lawsuit Seriously. If you know you haven't done anything wrong, it can be tempting to avoid hiring a lawyer at all. Developing a strategy, finding and interviewing witnesses, and getting paperwork in order can all be costly to your business if not done properly. To ensure you can keep your full attention on business operations during the lawsuit, hire a litigation attorney who specializes in helping business owners.

2. Not Considering Other Options. Sometimes in sticky litigation battles, one or either party may be too eager to settle before taking full stock of all assets at stake. Mediation and arbitration may also be other options to consider before going to court to save money on fees and avoid long delays.

3. Making Decisions Based on Emotions.
Being involved in litigation can be a highly emotional experience, and it can get very difficult to make important decisions that will affect your business. Instead of making impaired decisions based on your emotions, work with a business litigation attorney to come up with a strategic plan based on a cost-benefit analysis. Remember that the dispute is business related, and not personal.

4. Keeping Information from your Lawyer. Your lawyer is there to help you navigate the process, so it's imperative that you keep your lawyer apprised of all relevant information. Sometimes it may be overwhelming and frightening to present the "bad facts" to your lawyer, but hiding facts can seriously impact your chances of success in settlement discussions or in court.

5. Using the Wrong Lawyer. Be sure to do your research when it comes to finding a lawyer that specializes in the type of dispute you are a part of. The right lawyer will be able to provide you with objective advice that is best suited toward your business. Business can be extremely personal so it can be easy to overlook pertinent facts. To avoid clouded judgment and conquer inflexibility, always consult legal counsel to ensure your best chances of success. If you need advice or assistance on how to proceed, contact your team at Structure Law Group.

About Structure Law Group
Structure Law Group is a San Jose based firm that specializes in business issues including business formations, commercial contracts and litigation.

5 Items to Include in a Real Estate Purchase Contract

October 3, 2014,

5 Items to Include in a Real Estate Purchase Contract

When you make an offer on real estate you want to buy, there can be a lot of paperwork involved. Many additions to real estate purchase contracts are obvious, such as the address of the property, purchase price and owners. Here is a list of 5 things to consider and include when drafting a real estate purchase agreement.
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1. Legal Description of Property

Be sure to include a legal description of the property, including zoning information. In commercial real estate, this is more than just the mailing address of the property. Legal descriptions must include proper nomenclature used by the U.S. Public Land Survey System, including zoning codes. If the description is not included, the real estate contract may be invalid.

2. Closing Costs

You want to establish who pays closing costs in the real estate purchase contract. The buyer and seller should specify who is responsible for common fees such as escrow fees, title fees, title insurance, transfer tax and notary fees. If you want the seller to pay all or part of the closing costs, make sure to specify this in your offer. In California, the location of the property is used to determine how fees are divided.

3. Inspection Contingency

Make sure to include an inspection contingency in your purchase contract to protect yourself if a serious issue with the property comes to light after an inspection is conducted. This includes the buyer's right to cancel the sale after conducting due diligence.

4. Closing Date

Common time frames for closing dates are 30 days, 45 days and 60 days. You should allow sufficient time for closing contingencies, including financing the transaction.

5. Right to Modify Purchase Agreement

Allow yourself room to amend or modify the purchase contract after its completion. By adding a clause allowing the right to amend of modify, both parties may amend the purchase contract after it has been completed. Keep in mind that this does not change the original contract and large amendments are usually better done by creating a new contract.

By including these essential items in your real estate purchase contract, both the buyer and the seller are protected and the purchase is transparent for both parties. Be sure to sit with an experienced real estate lawyer before making final decisions.

About Structure Law Group

Structure Law Group is a San Jose based firm that specializes in business issues including business formations, commercial contracts and litigation.

Sole Proprietorships: Advantages and Disadvantages

September 26, 2014,

Sole Proprietorships: Advantages and Disadvantages

Many small businesses in the United States operate as sole proprietorships. In fact, this is the most common type of business and is business in its simplest form. In this article we will discuss some advantages and disadvantages of sole proprietorships and more specifically, owning and operating a sole proprietorship in California.
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Advantages of Sole Proprietorships

· Low start-up cost. Since there is no legal distinction between the person and the business entity, the sole proprietor is not required to register as a legal corporation. This saves on filing costs. Here in California, there is also a high minimum tax which sole proprietors avoid.

· No business taxes. Income generated through the business is reported and paid on the sole proprietors' personal income taxes.

· No annual compliance. Unlike corporations, sole proprietors are not required to pay annual fees to retain their legal status.

· Simplicity and speed of setting up your business. While starting a sole proprietorship, LLC or corporation requires compliance with licensing, local laws and regulations, individual owners of sole proprietorships have lower overhead costs and speed though the process.


Disadvantages of Sole Proprietorships

· Personal liability. Since the business is not legally separate from the owner, the owner is personally responsible for all debts and transactions.

· Fewer investment opportunities. Once an investor or partner has joined the business, it is no longer a sole proprietorship. The transformation of the company will require compliance with licensing requirements and filing fees. As a result, it may be hard to find an investor to back your company.

· Debt. Many sole proprietors have dipped into personal assets or acquired loans to start their company. Since a sole proprietorship is not a formal business entity, personal loans may impact the owner's credit score.

Is a sole proprietorship the right decision for you and your business? Your team here at Structure Law Group would be happy to help you start your sole proprietorship or answer any questions you may have. You can find more about the services we offer here.


About Structure Law Group

Structure Law Group is a San Jose based firm that specializes in business issues including business formations, commercial contracts and litigation.

Pros and Cons of a C Corporation vs. an S Corporation

September 19, 2014,

Pros and Cons of a C Corporation vs. an S Corporation

Selecting a business entity is one of the most important decisions an entrepreneur faces. There are numerous options including sole proprietorships, partnerships, limited liability companies and corporations. To make things even more complicated, there are two primary types of corporations, each with its own benefits. In order to ensure you choose the best business entity for your purposes, you should always conduct careful research and consult with an experienced California business attorney to discuss your options.

Once you have decided you want to incorporate, your options are to form a regular C Corporation or an S Corporation. Though these two types of corporations are quite similar, there are a few key differences that can determine which one is right for your business.
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3 Similarities between S & C Corporations
The following are a few ways that an S Corporation and C Corporation are alike:

1. Both types of corporations are owned by the shareholders, who have protections from liability for business debts and most business-related legal matters.
2. Both are structured the same way: the shareholder/owners elect a board of directors that oversees major issues. The board of directors then elects officers, who handle the day-to-day operations of the business.
3. Both must comply with state law regarding document filings, fees, bylaw and more.

Differences Between S Corporations and C Corporations

The most important difference between an S Corporation and C Corporation is the way that they are taxed. In both cases, shareholders pay taxes on dividends of any distributions of profits. A C Corporation, however, may also be taxed on the corporate level, which means it may be subject to double taxation. On the other hand, the taxes for an S Corporation all pass-through to the shareholders, so there is only single taxation. This pass-through taxation is authorized by IRS Code, Subchapter S of Chapter 1.

Though the single taxation of an S Corporation likely sounds preferable, the S Corporation entity is not an option for every business. Another difference between the two is that, while a C Corporation can be quite large and have numerous shareholders, an S Corporation may only have a maximum of 100 shareholders. In fact, the IRS created Subchapter S in part to encourage small businesses and entrepreneurship. Therefore, the size of your business may play a significant role in the type of corporate entity you choose.

If you have any questions about C Corporations, S Corporations, or other business entities, do not hesitate to contact an experienced attorney at the Structure Law Group for assistance today.

About Structure Law Group
Structure Law Group is a San Jose based firm that specializes in business issues including business formations, commercial contracts and litigation.

How to Write an Employment Contract

September 12, 2014,

An employment contract can be a useful tool to protect your business while providing clarity and structure for your employees. An effective agreement should clearly spell out the terms of both employment and termination. In this post we'll take a look at the basics of creating an employment contract.

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Understanding Employment Contracts

A well-designed contract outlines an employee's roles and responsibilities. What tasks is the employee expected to perform? What does the job pay? What benefits will the employee receive? Clearly stating this information upfront will protect your business from future lawsuits, provided you abide by the contract.

You'll want to be specific that the employment relationship is at-will. This means either the employer or the employee can terminate the agreement at any time for no reason. If instead it is not at-will, you should be sure to spell out the grounds for termination.
One thing to keep in mind is what happens after an employee is either terminated or leaves. Who owns the right to any material he or she produced? What about confidentiality? An employment contract can protect your business by safeguarding its intellectual property.

Advantages of Employment Contracts


Besides offering reassurance, an employment contract can be a great way to attract new talent. Think of a contract as an offer sheet. You're providing a prospective employee with job security and a clear path to success.

Contracts can also make it easier to manage employees. The expectations can be laid out for all to see, which means there's less gray area. Unfortunately, not all employees work out and a contract can avoid any confusion between employer and employee as to whether it is working out or not. make it easier to terminate employment should the need arise.

If you're thinking about putting together an employment contract, contact the professionals at Structure Law Group. We can help you create something that is specific to your business and adheres to the law.

About Structure Law Group

Structure Law Group is a San Jose based firm that specializes in business issues including business formations, commercial contracts and litigation.

What to Include in an LLC Operating Agreement

September 12, 2014,

In a previous blog post we briefly talked about operating agreements. This topic is important enough to merit further examination. We'll specifically look at what you need to include in an operating agreement for an LLC.
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The Purpose of an Operating Agreement

Think of an operating agreement as the founding document that spells out the essentials of your business. Everything should be outlined including the management structure, membership interest, capital contributions and the financial allocations and distributions. More isn't always better, but in this case being as detailed as possible will help you in the long run.

What to Include in an Operating Agreement


It's important to outline your management and financial structure. This will deter any potential disagreements if the LLC has more than one member. Failure to include such information in your operating agreement could make you subject to your state's default laws. For instance, some states have statutes that say members of an LLC must split profits and losses equally, regardless on ownership.

As mentioned above it is important to outline the capitalization of the Company. Capital Contributions are the amounts of money and values of property contributed by member(s). Also important is the distribution of profits and losses. Are members entitled to revenue generated by the LLC? If so, how much and how often are funds dispersed?

Finally, it is important to include guidelines for transfers of membership interest in the event of a death, incapacity, bankruptcy or if a member leaves or is bought out. You'll need to include rules detailing the buyout provisions. This can help make clear terms on how much is to be paid and when.

Creating an operating agreement can be a lot of work. It's best to consult a professional like the ones at Structure Law Group. A skilled attorney can help secure your business and provide you with peace of mind.

About Structure Law Group

Structure Law Group is a San Jose based firm that specializes in business issues including business formations, commercial contracts and litigation.

Funding a Startup: Regulation D

August 29, 2014,

There are a number of ways to fund a startup. We've all heard about loans, grants and crowdfunding but new rules from the SEC will make it easier for entrepreneurs to raise capital. In this post we're going to look at changes to "Regulation D" and what that means for startups.

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Understanding Regulation D

Regulation D is part of the Securities Act of 1933. Section 506 specifically deals with the solicitation of private offerings. In the past, the SEC essentially banned all forms of advertisement for private investment. The revised Regulation D does away with most of the restrictions. It's now possible for a company to publicly solicit funds for a private venture.

The New Regulation D

The game has changed but that doesn't mean there aren't rules. Only accredited investors can utilize the changes to Regulation D. These are people with $1 million in net worth or who make $200 thousand dollars a year in individual income. There is also a strict process for weeding out "bad actors." Generally, these are people who have committed some kind of financial crime or who have been disciplined by the SEC.

What it Means

The change to Regulation D is great news for startups. Increased access means greater opportunity to spread the word about a business and its product. A startup can now use every tool at its disposal to try and raise money. Another interesting aspect of Regulation D offerings is that there isn't a limit to the amount of capital that can be raised. Crowdfunding is a popular way to support startups. The key difference is that the total dollar amount in this model is capped at $1 million.

There is plenty more to learn about Regulation D and its cousin Regulation A. To find out more, contact the professionals at Structure Law Group.

About Structure Law Group

Structure Law Group is a San Jose based firm that specializes in business issues including business formations, commercial contracts and litigation.

Corporation Formation: 6 Steps to Success

August 22, 2014,

Forming a corporation may seem like a lot of work but the process isn't too difficult. In this blog post we'll walk you through some important steps to incorporate in California. Every state is different so make sure to check with the Secretary of State's Office in your area before getting started.

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1. Pick a Name

The name you pick for your corporation must not be the same, or similar to, one already on file with the California Secretary of State. You can search on the Secretary of State's website to see if the name you're thinking of using is original. You should also check beyond the state, e.g. nationally and even internationally. A name that is the same as, or similar to, one used in another state or country can pose problems.

2. File Articles of Incorporation

Be sure to include the corporation's name, purpose, name and address of a registered agent plus the number of shares the corporation is authorized to issue.

3. Appoint a Registered Agent

An agent is an individual or corporation that agrees to accept legal papers should your business be sued. You can find a list of registered agents by visiting the Secretary of State's website. You can also choose one of the company's owners to be a registered agent for your corporation.

4. Prepare Bylaws

Bylaws dictate how your corporation will be run. You're not legally required to file them, but most banks, investors, and others won't do business with you if they can't see how your company operates.

5. Appoint a Board of Directors

Among other things, this board will appoint officers, adopt bylaws and determine the corporation's fiscal year. The number of board members can vary, within certain parameters, and the directors need not be shareholders of the company, though they often are.

6. Issue Stock

Every shareholder should receive paper stock certificates. The stock is a security, and therefore, subject to state and federal securities laws. Properly complying with securities laws is an important step and one your attorney can help you with. Proper compliance will avoid liability for securities fraud in the future.

This list is by no means comprehensive but it does provide a working outline. For further assistance visit Structure Law Group's website.

About Structure Law Group

Structure Law Group is a San Jose based firm that specializes in business issues including business formations, commercial contracts and litigation.

Due Diligence, Mergers & Acquisitions Part I

August 15, 2014,

A merger or acquisition can be a great way to grow your business. Joining forces or purchasing another company increases your market share and potential profits. There's no real way to know if the venture will pay off. However, the proper due diligence can provide reassurance that the move you're making is a good one. Due diligence is a multi-step process, so in this post we're going to focus on just one part: liabilities.
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Understanding Liabilities

Any merger or acquisition comes with a degree of risk. Liabilities are the debts and obligations incurred through the course of doing business. Loans are considered a liability as are accounts payable and accrued expenses. It's important to take a look at the total number and dollar value of all liabilities. Also, look at the company's payment history. Are bills paid on time? Is there a record of default? These are red flags that should give you pause. Remember, once you've assumed liabilities the responsibility is yours.

Unrecorded Liabilities

An unrecorded liability is exactly as it sounds. This type of liability won't show up on any records or accounting statements. Before you call off your merger or acquisition, understand that unrecorded liabilities are normal. A common example is vacation time. Let's say an employee rolls over vacation time and, come retirement, hasn't used it all. He or she will be owed money in exchange for the hours. This can be a substantial cost if enough employees have banked their hours. The best way to find out about a company's unrecorded liabilities is to ask the right questions and request the relevant documents, or you can hire an experienced attorney.

Due diligence is a critical component of any merger or acquisition. Failure to do your homework can have dire financial consequences.

About Structure Law Group

Structure Law Group is a San Jose based firm that specializes in business issues including business formations, commercial contracts and litigation.

Business 101: Buy-Sell Agreements

August 8, 2014,

contract.jpgAny business with multiple owners should have a buy-sell agreement. A buy-sell agreement, provides order and clarity should anything happen to one of the owners. In this post we'll take a look at buy-sell agreements, how they work and what to include.

Understanding an Agreement

Let's say you and some family members get together and form a corporation or an LLC. Things are going pretty well, the business is making money and everyone is happy. Then something happens, maybe one of your family members dies or simply decides to leave the business. What happens to that person's stake in your company? A business without a buy-sell agreement can easily fall into in fighting and costly litigation, not to mention the impact on consumer confidence.

How to Craft a Buy-Sell Agreement

Really, the first thing you should do once you start thinking about forming a corporation, LLC or partnership is to hire an attorney. However, that doesn't mean you can't start talking with each other about what to include in a buy-sell agreement. Generally, you'll want to list the conditions that would lead one owner to buy out another. This can be anything from death to termination. You'll also want to outline the process for transferring ownership. Will the owners purchase the shares with their own money or will it be done through the business? Also, how will the sale price be determined? Some companies negotiate that upfront while others use a formula.

It's important to be detail oriented. You and your fellow owners should understand each part of the agreement. You don't want to be surprised later on when one of the owners sues you for paying in installments instead of one lump sum. The more specific the better. In the end, a buy-sell agreement may not only save your business, it may save your relationships.

About Structure Law Group

Structure Law Group is a San Jose based firm that specializes in business issues including business formations, commercial contracts and litigation.

Steps to Creating Bylaws

July 18, 2014,

rules.jpgOne of the first things any newly formed corporation should do is draft bylaws. Bylaws are a corporation's operational blueprint. They identify what the business does, how it is run and who is in charge. Here then are five steps to drafting a set of bylaws.

5 Steps to Creating Corporate Bylaws

1. Detail relevant information concerning shareholders. This includes who holds stake in your corporation, what rights they hold and when and where meetings are to be held.

2. Identify the Board of Directors. Include information on meetings, procedures for resignation and removal or addition of directors.

3. Outline the procedure by which officers are elected. Officers are people like the CEO or CFO. Detail their roles and responsibilities as well as how they will be compensated.

4. Indemnification of Officers, Directors, and Agents. In order to protect those who labor on behalf of the corporation, the bylaws should spell out who is indemnified for acts taken on behalf of the corporation, as well as the procedure for handling claims.

5. Finally, bylaws are made to be amended. What's the process look like? Deciding on this issue now will prevent headaches down the road. You'll want to figure out who has the authority to add, alter or completely remove a bylaw.

These five steps are really just a working model. There are fine points that should really only be handled by a professional. An attorney can help you craft a set of bylaws that are clear, sensible and legal. In reality, this process consists of at least six steps with the first being contacting a local lawyer to help get you started.

About Structure Law Group

Structure Law Group is a San Jose based firm that specializes in business issues including business formations, commercial contracts and litigation.

3 Steps to Creating a Strategic Alliance

July 11, 2014,

hands.jpgA strategic alliance is a fairly simple concept. Two companies with similar interests join forces to produce favorable outcomes for all involved. An everyday example is the Starbucks inside of Barnes and Noble bookstores. This move helped Starbucks expand, but it also kept people in the bookstore, perhaps reading the first few pages of a book they were thinking of buying. A strategic alliance is good for business, but you'll need to take the proper steps to make it work.

1,2,3 - The Steps to Creating a Strategic Alliance for Your Company

Step 1: Choosing a Partner

Companies create a strategic alliance to help increase their profits. A solid partnership is one that generates revenue that couldn't be achieved by going it alone. Therefore, it's important to pick a partner you trust and that has a solid reputation. Also, a strategic alliance is a long-term commitment. Results are monitored over years, not months, so be sure the company you pick is one you can work with for the foreseeable future.

Step 2: Crafting a Deal

Perhaps the most important part of this step is determining a strategy. How will you go about achieving your goals over the next 3-5 years? This is also the time to set boundaries and determine roles. It's critical that you and your potential partner agree on such things like operation details and rules for intellectual property.

Step 3: Making it Work

Remember, these are two companies with two different ways of doing things. To make your alliance work you'll need to cultivate relationships. You'll need to know who's in charge and what happens when something unexpected happens. The way you handle a particular situation may be different than your strategic alliance partner.

The best way to avoid confrontation is by creating a clear contract. A good contract will outline roles and responsibilities as well as provide an "out" should the alliance fall apart. The team at Structure Law Group can craft an agreement that satisfies such objectives. By putting everything in writing you protect your company legally from any problems that may arise.

Have questions about creating a strategic alliance for your company? Contact Structure Law Group today!

About Structure Law Group

Structure Law Group is a San Jose based firm that specializes in business issues including business formations, commercial contracts and litigation.

Gross Lease vs. Net Lease

July 6, 2014,

lease.jpgWhether you're starting a business or looking to expand, chances are you'll encounter some kind of lease. The most common are the gross lease and the net lease. In this blog post we'll take a look at the differences between the two and the benefits of each.

Gross Lease

In this scenario, the tenant pays a fixed amount each month. The landlord is responsible for the costs associated with property taxes, insurance and maintenance. A gross lease offers some flexibility because these properties are generally deemed as either Class B or Class C. They're less desirable so the landlord may be willing to negotiate over things like who pays the utility bill.

Net Lease

You'll likely see a net lease in properties deemed Class A. These are typically high value structures in a popular part of town. As such, tenants can expect to pay a fixed amount along with maintenance charges, insurance and taxes. The benefit to you as a business owner is exposure and the possibility of working in a new, less problem prone building.

Letter of Intent

Before you sign a gross lease or net lease, it's a good idea to craft a letter of intent. This document typically addresses issues like length of the rental, when the space is available and whether or not expansion is possible. You'll want to have a lawyer look over any lease documents. The professionals at Structure Law Group can help you craft a suitable letter of intent that protects your interests.

There is plenty more to consider when crafting a lease. At least now you understand the key differences between the two main types of commercial leases. This information will help you when you're coming up with a budget for your business. Knowing these costs up front eases some stress and makes it easier to get started.

About Structure Law Group

Structure Law Group is a San Jose based firm that specializes in business issues including business formations, commercial contracts and litigation.

Business 101: Litigation

June 20, 2014,

scale.jpgWith any luck, you or your business will never end up the subject of a lawsuit. Since this isn't a perfect world, it's best to start thinking about what to do if the unforeseen happens. Like most things, business litigation is an involved issue. We can't go through the entire process in one post, so we'll start with three basic steps to take if you find yourself in legal trouble.

Step 1: Purchase Liability Insurance

This step should happen long before trouble starts. In reality, this is one of the first things you should do as a business owner. Liability insurance protects the purchaser from the risks of liabilities imposed by lawsuits and similar claims. Say a customer slips on a wet spot in your store; your insurance would step in and handle the costs. You may want to add extra protection such as errors and omissions coverage. For businesses that have a Board of Directors it's a good idea to have directors and officers coverage. This type of coverage protects the corporation as well as the personal liabilities for the directors and officers of the corporation.

Step 2: Separate Yourself from Your Business

Sole proprietorships are a popular business structure. Unfortunately, these entities can leave you personally exposed. In this arrangement your personal property, including your home or car, are fair game in a lawsuit. To avoid this you want to create separation by forming a trust, or consider an alternative business structure. A trust is a legal entity that pays its own taxes and can own assets. Making the trust the legal owner of the business safeguards your money and property. Also, consider forming a corporation. Trusts and corporations are miles apart in terms of regulation but offer protection to the individual.

Step 3: Hire a Good Attorney

Of course it is always advisable to have an attorney on your side before any litigation to avoid potential lawsuits. If all else fails and you are served with the lawsuit, you should immediately consult your attorney. Time is of the essence. A quality attorney can help you through the initial steps.

Finally, it's a good idea to hire lawyers who specialize in specific fields. If you're served with a lawsuit or anticipating one then it's smart to hire an attorney familiar with litigation like the professionals at Structure Law Group.

About Structure Law Group

Structure Law Group is a San Jose based firm that specializes in business issues including business formations, commercial contracts and litigation.