Articles Posted in Business Transactions

AdobeStock_302452099-300x200The hectic San Jose real estate market can present challenges for any landlord or tenant. With complicated commercial lease agreements, the stakes are often higher, and the legal issues are more complicated. The San Jose real estate attorneys at Structure Law Group are here to help business owners from all industries understand commercial leases. What follows are some of the most common issues that arise in negotiating lease terms.

Price Terms

Unlike residential leases, a commercial lease is not always paid at a fixed monthly rate. The rate can vary depending on market conditions. For example, a tenant might need a lower rate during the off-season when business is slow. Commercial landlords may be willing to negotiate variable rates depending on market conditions, time of year, supply chain disruptions, and other events. Some commercial leases are not paid at a fixed rate at all. Instead, the landlord will agree to take a set percentage of the tenant’s retail sales or a base rent plus the commission of sales. All of these price terms can be negotiated between the landlord and tenant. All of these terms are also subject to the California Civil Code, which prevents rent control on commercial properties. A San Jose real estate lawyer can help either party determine what pricing structure will best meet their needs and goals.

AdobeStock_119264482-300x204Naming a business is a critical component of branding strategy for a person or entity involved in a California business. When the name of the business does not include the owner’s last name, a person or entity has to file a fictitious business name (FBN) statement with the office of the Registrar-Recorder or County Clerk in the specific county location for the business. This process is also known as registering a “Doing Business As” (DBA) or “Trade Name,” and a business without a location in California will have to register with the Clerk of Sacramento County.

The DBA requirement can be confusing for many people, but you do not have to handle everything on your own. Contact an LA business formation attorney with Structure Law Group, LLP for help with all your DBA needs.

When DBAs Apply

AdobeStock_96879652-300x200When you are selling a business in California, it can be a somewhat complex but still rewarding process that requires an exit strategy to realize the gains from building and operating a successful business. The number of moving parts when selling a business makes documentation of the terms of a sale critical, and there will generally be four stages to follow.

You are going to want to make sure that you have legal counsel when you are negotiating the sale of your business. A California business attorney with Structure Law Group, LLP, can walk you through the entire process.

Preparing to Sell the Business

AdobeStock_204199356-300x169The prospect of buying an existing business in California can be an extraordinarily exciting time for all types of people, but there will be several concerns of which a prospective business owner needs to be aware. You do not want to leap into any business venture without performing due diligence when it comes to research and preparation.

Structure Law Group, LLP is a business law firm that has offices in both Silicon Valley and Los Angeles to help focus on all kinds of business transactions and litigation for clients throughout California. When you are considering buying any business in the Golden State, be sure you are working with an experienced Los Angeles business attorney.

Get Full and Complete Disclosure

AdobeStock_445476294-300x200When entrepreneurs are starting a business involving a partner or multiple partners, a buy-sell agreement will be a must-have because the agreement will establish protections for every party and the company if something happens or an exit event occurs with any of the business partners. Without this agreement, several variables may emerge, including a family member or other party taking ownership or a controlling stake without any concern for business success.

Formulating a buy-sell agreement can be a big demand, but you can get competent legal help in formulating this agreement. A Los Angeles business attorney with Structure Law Group, LLP can help you craft a buy-sell agreement that will focus on protecting your business for the long run.

When You Need a Buy-Sell Agreement

AdobeStock_516820932-300x200There are many risks involved with entering into any contract. Business litigation costs time and money that interferes with efficient business operations. The best way to mitigate the risk of a business contract is to hire an experienced Los Angeles business attorney to draft your contract with as much protection as possible. At Structure Law Group, our skilled Los Angeles business litigation lawyers know how to prevent disputes in the drafting phase, negotiate dispute resolution during the contract performance, and litigate disputes in court when necessary.

Financial Protections

Some contract provisions provide financial protection. Insurance requirements, for example, can provide financial security against the risk of loss. Los Angeles business owners can also create financial protection with a liquidated damages clause. This contract provision imposes a set monetary fee, that a breaching party is required to pay in the event that they breach the contract. It is not designed to be a penalty, so courts will usually not enforce liquidated damages provisions that are not closely tailored to the party’s actual financial losses. But setting the amount of these financial losses ahead of time provides one party with financial security in the event that the other party breaches the contract. It also sets a financial incentive to encourage both parties to comply with the contract.

AdobeStock_330254153-300x200Classifying workers as employees or independent contractors has many different legal implications. In recent years, massive litigation efforts from big companies like Uber have highlighted confusion in this area of the law. This confusion led to the passage of AB-5, which was signed into law in September 2019. The law creates a test for determining whether a worker should be properly classified as an employee or an independent contractor. Business owners should understand this law so they can apply it properly to all workers and thus avoid unnecessary liability.

How AB-5 Changed the Rules of Classification

The new test for classification is known as the “ABC Test”:

AdobeStock_183215665-300x158A corporation is a legal entity that grants its shareholders and directors certain legal protections. While these members are generally protected from the debts of a business, it is not always the case. A plaintiff can “pierce the corporate veil” in certain situations, meaning that the court will hold the shareholder or director personally liable for the debts of the business. It also means that your personal assets can be used to satisfy business debts. Learn more about “piercing the corporate veil” – and what a corporate lawyer can do to help minimize your risk of liability.

What Is “Piercing the Corporate Veil?”

In common law, corporations have provided legal protections for their shareholders and directors. Shareholders and directors are not generally held personally liable for the debts of their business. In some limited circumstances, however, it might be possible to “pierce the corporate veil” of legal protection and hold them personally liable for corporate debts. Doing so allows plaintiffs to access the personal assets of shareholders and directors to satisfy the debts of the business.

AdobeStock_185592300-300x200Business owners have been confronted with a host of costly legal issues as a result of the COVID-19 pandemic. For those with employees, the risk of COVID lawsuits has been a serious concern from the earliest days of the pandemic. Most employers assume that any COVID lawsuits will be covered by their liability insurance. Unfortunately, this has not always been the case.

Workers Comp Lawsuits V. Personal Injury Lawsuits

First, it is important for employers to understand the difference between workers’ compensation coverage and liability coverage. Workers’ compensation coverage pays for any injury that employees sustain in the scope and course of their employment. The employee does not have to prove negligence – so long as the injury occurred on the job, it will be covered. If an employee believes they can prove that the employer was negligent, they can file a personal injury lawsuit against their employer. These lawsuits are not covered by workers’ compensation coverage. An employer must maintain a separate general liability policy to cover claims of this nature.

AdobeStock_101676859-300x200Corporations are subject to many fiduciary rules that govern their operations. Most business persons are familiar with the prohibition on interested transactions and placing one’s own financial interests ahead of the company’s. Yet the application of this rule varies widely from state to state. The Delaware Supreme Court has recently issued a ruling that will apply to the many businesses which fall under Delaware’s state laws of corporate governance. Learn more about the standard of review for interested transactions between a controlling shareholder and their subsidiary company:

In re MFW

The litigation started with a dispute between the shareholders of M&F Worldwide (MFW). A merger was proposed between the controlling stockholder and a subsidiary company. Minority shareholders objected to the merger and brought suit to stop it. Prior case law had subjected such transactions to the stringent standard of “entire fairness.” Yet, in this case, where there were two important procedural safeguards protecting the minority interest, the Court of Chancery held that the more lenient “business judgment” standard could be applied. The ruling was appealed to the Delaware Supreme Court. Because the Supreme Court affirmed the ruling, it has created a new legal standard under Delaware law.