Articles Posted in Partnerships

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_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_183500602-300x200Business owners in Silicon Valley are well acquainted with all kinds of legal contracts. It is important to know your legal rights – as well as your obligations – under any contract. Many contractors try to bully others with threats of breach of contract and costly litigation. The experienced contract lawyers at Structure Law Group are here to help your business handle all types of breach of contract issues. Here are some of the most common disputes:

A Vendor’s Breach of Contract

Most businesses must enter into vendor contracts to get the goods and services necessary for their daily operations. If these vendors breach their contractual obligations, your business could be left unable to deliver on its own contractual duties to customers. A well-drafted vendor contract can help prevent confusion or ambiguity. Our contract attorneys can also help you determine the best course of action when a vendor breaches a contract. While litigation is sometimes necessary, it is not always worth the cost of a damaged business relationship with a trusted partner. An experienced contracts lawyer will be able to give you options for handling the problem.

AdobeStock_292580187-e1576014509781-300x183A partnership is like a marriage. It takes effective communication to meet mutual goals. You can avoid many partnership disputes by creating a clear operating agreement before the partnership starts doing business. The experienced San Jose business attorneys at Structure Law Group can help you avoid unnecessary partnership disputes. By executing a clear, binding, and specific partnership agreement, you can save time and expense that ultimately hurts your business. Call (408) 441-7500 to schedule a consultation with one of our skilled San Jose business lawyers. We have helped many Northern California businesses create effective operating agreements.

How to Create an Effective Operating Agreement

There are several important steps to follow in order to create an agreement that will effectively resolve disputes in future business transactions:

partnerships-vs-llcs-300x200When starting a new business, it is important to know what type of business entity will best protect you and your investors. The wrong entity selection could expose your business to unnecessary legal liability and tax liability. Let an experienced business formation attorney advise you on the best way to protect your new business. Call Structure Law Group at (408) 441-7500. Our experienced Silicon Valley business lawyers can help you mitigate your liability and risks to keep your new business profitable.

What to Consider When Deciding Between a Partnership and an LLC

There are many factors that can affect your choice of business entity. Here are just a few of the many important things to consider:

Fotolia_189107114_Subscription_Monthly_M-300x200Perhaps more so than any other kind of business structure, a partnership is heavily reliant upon the personal relationships among the partners. If those relationships are good, the partnership has a much better chance to function smoothly. If not, the personal nature of partnerships generally means that rocky personal relationships will lead to a rocky business relationship. All too often, partners join up based on prior personal relationships that were good, only to find they did not consider business philosophies before forming the partnership. Business differences can lead to personal differences, making it that much more unlikely that the partnership’s problems can be worked out.

Start Early to Avoid Partnership Disputes

Partnerships often are formed by people working in the same industry or friends who develop an idea together. They are common in the practice of law, as well as in a number of different small businesses. Partnerships are frequently a few individuals joining together to start a business. There are steps they should take to minimize the possibility of disputes. These steps include:

Fotolia_69411638_Subscription_Monthly_M-300x200Contracts are essential to any business deal. No matter how close the parties and no matter how clearly the terms are spelled out, there is always a possibility of the other party breaching the contract. Whether a contract is with a vendor, another business, an employee, or any other party, a breach can cause financial harm to your company.

Fortunately, a contract should also dictate your rights and options to seek legal remedies in the event of a breach. Our experienced business and contract attorneys can help you through each step of this process to ensure the matter is resolved as efficiently and favorably as possible.

  1. Talk to the other party. Sometimes, a party to a contract may not even realize they are in breach of the agreement. If the breach involves non-payment, there may be ways to agree on a payment plan or another arrangement to fulfill the contract without taking legal action. It is always a good idea to speak with a party – or have your lawyer do so – to explore options to resolve the issue.

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Starting a business partnership can be very exciting. You are ready to hit the ground running with your new venture. However, you will want to pause and make sure you have your legal interests well documented and in order before you jump into starting the business. The corporate attorneys at Structure Law Group understand the intricacies of forming a partnership and putting safeguards in place should a problem later arise.

California Partnership Legal Classifications

General Partnership

Fotolia_194134312_Subscription_Monthly_M-300x200It may seem simple to try and put together a shareholder agreement on your own. However, a carefully drafted shareholder agreement is imperative to how your business functions in the present, but more importantly how you might need to handle things in the future. You will want your shareholder agreement to be carefully drafted to match your business’ specific needs. Even though every shareholder agreement will be different, there are some common components that most shareholder agreements include.

Governance Procedures

The shareholder agreement can outline how often meetings should be held. It can also describe the process for general or special meetings, quorum needed for specific types of matters, and how notices for the meetings should be sent. The addition of theses details not only spells out the procedural process, but also notifies members of their duties and rights as a shareholder.

When multiple individuals begin conducting business together, they may have effectively created a partnership, even if they didn’t intend to do so.  Thus, even though partnerships can be formed without the partners actually signing a partnership agreement, the partnership and its partners become subject to state laws governing partnerships.  The California business attorneys at Structure Law Group, LLP understand the laws and mechanics required to build a strong foundation for a partnership.  Being careful and meticulous about the partnership formation process can also help to prevent litigation if and when a dispute arises between and among business partners.

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Partnership Agreements

 Although not required under California law, as discussed above, entering into a partnership agreement when forming a partnership is highly recommended.  A partnership agreement is a legally binding contract that, among other things, dictates the roles of the partners and establishes guidelines for management of the partnership.  In addition, partnership agreements set out how potential legal disputes will be resolved.