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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.

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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.

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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

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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.

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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.

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Converting a limited liability company to a corporation is a relatively easy process. Before I take you through the steps, let’s take a quick look at the differences between the two types of business structures.

3 Differences Between Limited Liability Companies and Corporations

1. LLCs are formed by one or more people (members). These members file Articles of Organization and craft an Operating Agreement. Corporations file similar paperwork. However, unlike LLCs, corporations have shareholders and governing bodies like a Board of Directors.

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llc.jpgLimited liability companies combine parts of both corporations and partnerships. Because they’re a hybrid, LLC’s can be more difficult to setup. One part of this process involves choosing a management structure to fit your specific LLC.

Single Member or Multiple Member LLC

The difference here is implied in the name. Single member LLC’s have only one owner, while multiple member LLC’s have at least two. Choosing one over the other typically comes down to financing. Starting a single member LLC comes with a higher level of risk as the profits and losses are reported on the individual’s tax return. However, as the sole owner, you don’t have the stress of running a company with another person.

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You’re ready to hire. Should you go with an employee or independent contractor? Your decision will have implications for your business. In this blog post we’ll address the differences between employees and independent contractors, the benefits of both and how to tell the difference between the two.

What is an Employee?

A simple definition of an employee is someone you hire and directly manage. Employees are generally provided training by the business and work for only one employer. A benefit of hiring an employee is that you get to set a schedule and train the person in the way you want things done. Employers generally have more control over the end result in this situation.

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A quick scan of the headlines shows come confusion about the deal between AT&T and DirecTV. Some media outlets are calling it an acquisition while others say the 48 billion dollar purchase is a merger. Mergers and acquisitions are similar with a few important distinctions. In this post we’ll address the key differences between these two kinds of transactions.

What is a Merger?

One component of mergers and acquisitions is relational. Mergers are seen as the more friendly way of doing business. When two firms merge, both shed their old companies to form a new one. A good example is the merger between Daimler-Benz and Chrysler. In this scenario, both companies ceased to exist. They issued new stock as Daimler-Chrysler. Mergers are a common occurrence between two companies of equal size and standing.

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Business is an ongoing back-and-forth between interested parties. Contract negotiations, whether they be with employees or a competing business, can be contentious. There’s a lot at stake and big feelings are involved. A successful contract negotiation is one where all parties feel they got something out of the deal. This isn’t wishful thinking. By following these four simple tips you can create an environment where everyone is heard and respected.

1. Multiple Meetings

The first tip is pretty straightforward. Break down the negotiation into multiple sessions. The longer you sit at a table arguing over the same points the less likely you’ll come to an agreement. Give the person time to digest the information. Clear eyes and a fresh head make for better judgment.

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