You may have only heard the term “RICO charges” on TV crime shows and in movies, but it is a very serious matter with severe consequences for those who are charged and convicted. The acronym “RICO” represents the Federal Racketeer Influenced and Corrupt Organization Act and applies to different kinds of criminal activities that take place throughout the country.
About the RICO Act
This federal law (§ 1961) was originally designed to fight organized crime and passed in 1970. The accused can be an “individual, partnership, corporation, association, or other legal entity,” but can also be a group of associated individuals. There has to be two or more acts of racketeering within a certain time frame. The prohibited racketeering activities listed in RICO include:
- Acts or threats involving murder
There are others as well, such as dealing in a controlled substance and dealing in an obscene matter. RICO lists other illegal activities, like wire fraud, money laundering, counterfeiting, collecting unlawful debts, and receiving income that’s derived from patterns of racketeering activity. In all, RICO covers over 30 kinds of crimes.
What are RICO Act Penalties?
Since RICO charges are of a criminal nature, those who are convicted of violating these laws face substantial penalties. To start, the hefty fines can be as much as twice the amount of any proceeds received from the illegal activities. The other consequence is even worse, as it involves prison time that can range from less than a year to a life sentence, depending on the crime and state laws. A first RICO conviction in Pennsylvania is a first-degree felony that comes with minimum of nine months in prison; the maximum is 20 years and a fine of $25,000. If convicted, the defendant’s total interest in the criminal enterprise is given to the federal government.
When RICO was passed, it also included procedural rules allowing the government to freeze defendant assets before cases went to court. This was done to ensure that the money would not disappear before the trial started and a guilty verdict was handed down.
Can the Government Prosecute Me Under RICO?
The RICO laws are not just for organized crime groups and their members. Those outside this realm can also be charged with the violent and drug-related crimes listed above. White-collar crimes like embezzlement, gambling, and mail fraud can also be charged, prosecuted, and convicted. Plaintiffs who were injured or otherwise harmed by RICO violations committed by other parties can also seek damages in civil suits. There is a four-year statute of limitations in these cases, but no cap on the damages.
In Pennsylvania, the state has to prove that you participated in two or more racketeering activities within a 10-year time frame in order to prosecute. They also must show that you participated or were invested in the illegal enterprise. Again, if charged under RICO, your assets related to the activity will be frozen until the case is completed and a verdict is handed down. If you are charged with multiple counts, the prison time and fines could be extended and increased.
The Philadelphia Business Lawyers at Sidkoff, Pincus & Green P.C. Defend Clients Facing RICO Charges
You should not face RICO charges without experienced legal representation, and the Philadelphia business lawyers at Sidkoff, Pincus & Green P.C. will fight to protect your rights if you have been charged. For a confidential consultation, call our Philadelphia offices at 215-574-0600 or complete our online form. We serve clients in throughout Pennsylvania and New Jersey.
A whistleblower is someone who works within a private sector or government organization and reveals abuses of power and other bad behaviors done by their employer that betray the public’s trust. The information they share can be revealed internally or disclosed to Congress, other government channels, law enforcement, and/or the public. But since whistleblowers run the risk of facing repercussions from their employers, should they continue working after speaking out?
The Aftermath of Whistleblowing
Being a whistleblower can be stressful, even when the person has good intentions. It is often portrayed as a heroic action, if you consider the individuals who pulled back the curtain on Enron, released the Pentagon Papers, or shed light on the tobacco industry. The public might view them as heroes, but the truth is that a whistleblower’s career can change forever.
Even though the Whistleblower Protection Enhancement Act of 2012 was passed, approximately 30 percent of government workers claim they worry about retaliation for reporting wrongdoing. Since the government can have more oversight, it makes sense that private-sector whistleblowers worry even more in this respect. It has been reported that as much as 44 percent of these employees have experienced instances of retaliation.
What is the Whistleblowing Process Like?
You do not have to be working at the company that is the focus of the whistleblowing action, but if were taking part in the alleged illegal behavior you can consult a whistleblower attorney about how to handle it. All of the information will be kept confidential, and your identity will stay anonymous unless you decide to grant permission to provide your name.
Here are some of the programs in the U.S. that whistleblowers can pursue cases through:
- The False Claims Act (FCA)
- SEC Whistleblower Program
- IRS Whistleblower Program
- Commodity Futures Trading Commission (CFTC)
Claims can be filed under more than one of these, and there are statutes of limitations that apply. You must work with an attorney to file a case under the FCA, and using one for the SEC and CFTC will let you file anonymously. In any case, having an experienced lawyer may help facilitate your claim and increase the chances of success.
A successful case that leads to the recovery of fraudulently gained funds is a good thing, as the whistleblower can receive a percentage of the amount of money recovered as a reward. This can range from 10 to 30 percent, but every case is different.
Can I Keep Working After Whistleblowing?
If you work with an attorney, your identity will remain confidential throughout most of the process unless you grant permission to share your name. Federal law protects you from being retaliated against at work after reporting illegal company actions to the government. This means that you cannot be subjected to adverse employment decisions like demotions or firings based on what you did to expose the illegal conduct. If the employer does retaliate, you could be entitled to additional damages in a subsequent employment lawsuit.
There are also state laws that protect public employees from that kind of retaliation, but these might not apply to your situation. The amount of protection will receive depends on if the company is private, public, or a government entity, who your report the wrongdoing to, they kind of wrongdoing, and the applicable laws. The option of returning to work may be viable or then again, it may not.
If you are thinking about whistleblowing, you are taking on the risk of being suspended, demoted, transferred, fired, or facing other kinds of retaliation. That is why it is important to consult with an experienced employment lawyer before filing the claim – this way, an experienced professional who has your best interests in mind can guide you through the process.
The Philadelphia Employment Lawyers at Sidkoff, Pincus & Green P.C. Assist and Protect Whistleblowers
It takes courage to become a whistleblower, and trusted legal guidance to help you make your claim. For a confidential consultation, contact the skilled Philadelphia employment lawyers from Sidkoff, Pincus & Green P.C. Reach out by calling 215-574-0600 or completing our online form. From our office in Philadelphia, we proudly serve clients throughout South Jersey and Pennsylvania.
Whether searching for employment, aiming for a promotion, or simply trying to hold on to their current position, older women face extra challenges in the workplace. They face the dual threat of age and gender discrimination, which often hinders their chances of success.
Despite often having ample experience and qualifications, many sexist biases against women follow them while working during their older years. An employer’s preference for younger women at work could cause older women in the same workplace to experience gender and age discrimination. The compound discriminations could result in lower pay, fewer opportunities for advancement, and forced early retirement.
Age Discrimination Commonly Occurs in the Workplace
The American Association of Retired Persons (AARP) says 90 percent of workers surveyed in the United States say that age discrimination commonly happens at their place of work. A majority of women and men alike say that they experienced age discrimination while working.
Women are slightly more likely than men to say they experienced age discrimination at work. The AARP says 64 percent of women and 59 percent of men surveyed said that they experienced age discrimination.
While a vast majority of all workers say age discrimination occurs, very few file complaints. The AARP says only three percent of those surveyed said they filed a formal discrimination complaint.
What to Do if You Experience Workplace Discrimination
The Equal Employment Opportunity Commission (EEOC) says any age-based discrimination is illegal. The federal employment oversight agency investigates complaints filed by anyone age 40 or older.
If you have good reason to think you were passed over for a hiring opportunity, promotion, or other work-related matter due to your age, you could file a complaint with the EEOC. The EEOC will investigate a complaint and determine whether or not it has merit. When an age discrimination complaint has merit, you can then file a civil action in federal court.
An experienced business lawyer can help you to prepare an EEOC complaint and support it with evidence. The federal agency will have up to six months to investigate your claim and either approve or deny it. An approval enables you to move forward with a lawsuit against the discriminatory employer. That is true in the state court system, too.
Possible State-Level Action in Pennsylvania
Your attorney also can help with state-level filings that might enable you to file a civil complaint in the Pennsylvania court system. Pennsylvania law outlaws age discrimination and other forms of workplace discrimination.
The Pennsylvania Human Relations Commission (PHRC) investigates discrimination complaints. If it says your complaint has merit, you could pursue legal action in the state courts.
You do not have to file complaints with the EEOC and the PHRC. The federal and state agencies accept the decision of the other regarding workplace discrimination investigations. If you file with the PHRC and it says your complaint has merit, you can file a federal action as well as a state action.
Philadelphia Business Lawyers at Sidkoff, Pincus & Green Defend Workers’ Rights
If you were discriminated against at work, contact the experienced Philadelphia business lawyers at Sidkoff, Pincus & Green today. Fill out our online form or call 215-574-0600 to schedule an initial consultation at our Philadelphia law office. We represent clients throughout Pennsylvania and New Jersey.
Intellectual property (IP) is defined as any product of the human intellect such as inventions, designs and symbols, artwork, business and product names, website content, and other creations used in commerce. While the internet is a useful tool for businesses to reach a wide range of people, it simultaneously provides wide exposure to theft and copying. The importance of protecting your intellectual property cannot be emphasized enough and the four main ways to do so are through copyrights, trademarks, patents, and trade secrets.
Copyrights are used to protect a creator’s manuscripts, song lyrics, photographs, paintings, sound recordings, and other original ideas. Although you own the copyright at the time you create something, registering the copyright with the U.S. Copyright Office gives you exclusive and enhanced rights such as the ability to seek damages when infringements occur. In most cases a copyright expires 70 years after the death of the of the creator.
Trademarks are protected symbols, logos, words, or phrases that identify your service or product. A trademark should be registered with the U.S. Patent and Trademark Office (USPTO) and renewed every ten years. Because a trademark identifies goods and services as belonging to one owner you could run into disputes if your trademark is similar enough to that of another company.
How Do Patents Protect My Intellectual Property?
Patents protect unique inventions such as machines, equipment, chemical composition, or processes. Once patented, no one else can make or distribute your invention unless you have given them license to do so. Patents are granted by filing an application with the USPTO and are usually valid for 15 to 20 years after the filing date. Note that a patent cannot be obtained for something that already exists.
“Trade secrets” are not registered with any government office but are intellectual property important enough to a company that it cannot be shared with competitors or become public knowledge. To do so might seriously jeopardize the prospects of the company. Trade secrets can be protected with nondisclosure agreements that prevent involved parties from sharing information with outsiders. If you can show that your company had protocols and procedures in place to protect your trade secrets and a theft occurs, you will be able to seek damages in court. Intercompany theft of intellectual property and corporate espionage are federal offenses.
Additional Steps to Take to Protect Your Intellectual Property
After registering your intellectual property with the government and enforcing any infringements you can further protect your published work and ideas by using digital rights management to limit online access, preventing others from copying, saving, and editing your work, blocking them from printing, sharing, and taking screenshots, and watermarking your work to show ownership.
Documentation is also helpful in proving ownership of intellectual property. At every step of your creative process document in detail what you are doing and how by using drawings, plans, descriptions, and written records. Including the date on each one is critical as evidence of when you first produced your original creation.
Deciding how to apply these different kinds of intellectual property protections can be complicated and should be done with the counsel of an experienced business lawyer.
Philadelphia Business Lawyers at Sidkoff, Pincus & Green Protect and Defend Your Intellectual Property Rights
Have you experienced copyright, trademark, or patent infringement? At Sidkoff, Pincus & Green we aggressively defend and protect our clients’ intellectual property rights. To schedule a consultation with one of our experienced Philadelphia business lawyers, call 215-574-0600 today or contact us online. Located in Philadelphia, we represent clients throughout Pennsylvania and nationwide.
In an ideal contract situation, both parties would uphold their side of the agreement, both sides would obtain what was agreed upon, and no issues would come up. However, it can be difficult to maintain a contract, even when both parties want to. Unexpected situations can present themselves without warning, and disputes could arise causing delays. This could sometimes lead to a breach of contract.
A breach of contract happens when a party of a legal binding agreement does not honor their side of the contract, either by not performing an action outlined in the contract, whether it is not performed on time, not performed in accordance with the agreement, or not performed at all. There are three distinct ways a party can breach a contract, depending on the agreement’s subject matter:
- Either partially or fully not performing the obligations set forth in the contract. This is known as an actual breach of contract.
- Behaving in a way that shows intent to not perform the obligations set forth in the contract. This is otherwise known as a renunciatory or anticipatory breach.
- Acting in a way that makes the obligations defined in the contract impossible to perform. This can also be known as a renunciatory breach.
Breaching a contract can have serious consequences. When a breach of contract occurs, the breaching party must pay damages to the aggrieved party. It typically can have significant financial consequences, such as:
- Lost income
- Lost profits
- Increased rental costs
- Lost rental income
- Increased labor costs
- Increase material costs
The nature of the breach typically determines how to remedy the breach. A minor breach, whereas the contract itself is not entirely violated and can still be performed in a certain manner, can often be remedied quickly because a minor breach is when one party fails to perform a small detail of the agreement. The contract typically allows a party a certain amount of time to fix the mistake.
A material breach, also known as a fundamental breach, is such an egregious error that it cancels the contract, and the nonbreaching party no longer must uphold their end of the contract and has the right to file a lawsuit. The contract will typically have the options to remedy the breach, either through mediation or arbitration before filing a lawsuit.
Pennsylvania law allows for damages to be recovered when a contract is breached, but it must total a sum that compensates the aggrieved party for their losses. The nonbreaching party must present evidence, however, that the damages they incurred were reasonably foreseeable at the time the contract was entered and reasonably certain in terms of calculations:
- Reasonably foreseeable: The damages recovered for the nonbreaching party must be a direct result of the contract breach and reasonably foreseeable at the time the parties agreed in the contract.
- Reasonably certain calculations: The nonbreaching party has the burden of proving the calculations of their damages by a fair degree of probability. It does not have to be exact, and the jury is forbidden to speculate the amounts. The amount should put the nonbreaching party in or as nearly in the same position they would have been if the contract had not been breached. If the damages cannot be calculated with certainty, then the nonbreaching party is entitled to damages made during or in anticipation of the performance of the contract.
Philadelphia Employment Lawyers at Sidkoff, Pincus & Green P.C. Help Parties Who Face Contractual Difficulties
If you believe you are in breach of contract, or are facing contractual difficulties, then contact the knowledgeable Philadelphia employment lawyers at Sidkoff, Pincus & Green P.C. immediately. Call us today at 215-574-0600 or fill out our online form to schedule an initial consultation. With our offices located in Philadelphia, we proudly serve all clients of South Jersey, Pennsylvania, and New Jersey.
Non-disclosure agreements, or NDAs, are a common component of employment contracts in today’s workplace. They are used to prevent employees from disclosing trade secrets and confidential company information, but do NDAs apply to sexual harassment complaints and other civil rights matters? The answer is complex and depends largely on the terms of your employment.
We will explore this issue and recommend next steps to protect your rights and your interests if you experience sexual harassment at work.
NDAs as a Tool to Keep Employees Quiet About Workplace Harassment
It makes sense that companies want to keep trade secrets under wraps. If inside company information gets out, it could seriously impact their bottom line. But is it fair to expect employees to keep the details of a sexual harassment complaint confidential?
It may not seem fair, but it is possible. Your right to speak out depends on the confidentiality agreement you sign when you take a job or settle a harassment case.
An Example of an NDA in a Settlement Agreement
Let us take the example of a male worker who files a sexual harassment complaint against a supervisor who repeatedly asks him out on a date—while he repeatedly declines the offer.
His boss even promises him a raise if he consents to a romantic relationship with her. When he declines again, she gives the job to another employee with less skills and experience. This scenario has all of the components of a valid sexual harassment case.
After finally having enough, he reports his supervisor. With texts and emails to support his claims, the employer has no choice but to act. To avoid litigation, the company negotiates a settlement with the employee. They agree to compensate the employee with a caveat—he must agree not to disclose the amount of the settlement or the details of the allegations.
If the employee violates this provision, the employer can sue them in civil court. However, because lawsuits are public record, they may refrain from enforcing an NDA to keep the case as quiet as possible.
There are other ways to discourage an employee from speaking out. Some settlement agreements contain a provision that states they can stop paying the employee if that employee discloses privileged information. Other settlement agreements have a “liquidated damages” clause that requires an employee who violates an NDA to pay the company a specific amount of money.
Why Are NDAs Problematic in Sexual Harassment Cases?
Of course, employers do not want the public to find out about sexual harassment and other civil rights violations that occur in the workplace. But when we are quiet about these pervasive issues, they are more likely to continue.
As we have seen with the recent “Me Too” movement, shedding light on the problem is the key to awareness and prevention of sexual harassment. Everyone deserves a safe, equitable, and inclusive work environment.
Bill 849: Disclosing Sexual Harassment in the Workplace Act
NDAs that prevent individuals from speaking out about harassment may be a thing of the past in Pennsylvania if House Bill 849 is approved. The bill, which has been referred to the state senate’s Labor and Industry committee for approval, would ban NDAs related to sexual harassment as a requirement for employment—unless it was agreed to by both parties.
Federally, the U.S. Senate Judiciary Committee in September unanimously approved the Speak Out Act, a bill that invalidates NDAs specifically designed to prevent employees from publicly disclosing instances of workplace sexual harassment or assault in order to prevent future harm to others. Similar state bills have already been passed in New York, New Jersey, California, and Illinois.
Currently in Pennsylvania, your NDA precludes you from sharing your experience, you can face possible legal action, damages, or a smaller settlement if you do. It is best to have your Philadelphia employment lawyer review any employment contract, non-disclosure agreement, or settlement agreement before you sign. This way, you are fully-informed of your rights and obligations at all times.
Philadelphia Employment Lawyers at Sidkoff, Pincus & Green, P.C., Are Committed to Protecting Clients’ Civil Rights
If you have experienced sexual harassment or other forms of discrimination at your job, the skilled Philadelphia employment lawyers at Sidkoff, Pincus & Green, P.C. can help. Established in 1958, we have a proven track record of success achieving good outcomes for our clients. Call 215-574-0600 or contact the firm online to schedule a consultation today. Located in Philadelphia, we serve all of Pennsylvania and New Jersey.
Transgender workers earn nearly a third less than their cisgender coworkers, despite having similar levels of education and experience, a recent study shows.
The United States has more than 2 million workers who identify as transgender, so earning less impacts a significant number of working adults. Researchers with McKinsey & Company in 2021 reported transgender workers receive 32 percent less in pay than those who are doing the same job and are equally qualified.
The lack of equal pay is a serious problem for many transgender employees and may violate respective state or federal laws against discrimination.
Wide Pay Disparity for Transgender Workers
Virtually all workers who comprise the LGBTQ+ community say they are paid significantly less than their equally qualified and experienced counterparts. A recent study done by the HRC Foundation shows they are paid about 10 percent less than other workers, on average.
While 10 percent is a significant amount, it is much less than the 32 percent pay discrepancy among transgender workers. The disparity suggests transgender employees are among the least valued and lowest-paid workers regardless of their experience, education, and qualifications.
Majority of Transgender Employees Feel Excluded
The McKinsey report says more than half of transgender employees say they are not comfortable while at work. Many say they stay silent during work meetings and generally avoid socializing with coworkers.
The relative isolation of transgender employees makes it much harder for them to contest pay disparities orto simply feel included and respected while at work. Self-isolation will not help, but that often is a symptom of the workplace discrimination that occurs against transgender employees.
A lot of transgender employees say they do not feel as supported by employers as other employees. When they get paid nearly a third less than their equally qualified and experienced counterparts, the income disparity contributes to the feeling of alienation and a lack of support.
Pay Disparity Contributes to Transgender Poverty Levels
A darker side of the apparent pay disparity is its economic effect on transgender employees. Transgender people in general suffer high rates of poverty with about 22 percent living at or below the federal poverty level.
When paid almost a third less than others with similar experience and qualifications, the potential for impoverishment becomes much greater. Fortunately, you can fight pay discrimination and enforce your equal rights as a transgender employee when you retain an experienced employment attorney.
How to Fight Pay Discrimination?
Federal and many state laws say it is a type of sex discrimination to pay someone less due to gender identity. Pennsylvania and New Jersey laws ban discrimination based on gender identity, including lower rates of pay.
If you identify as transgender and are receiving less pay than your counterparts, you should retain an experienced employment lawyer to help uphold your rights. Your attorney can review your situation and help you to build a strong case that shows your employer is discriminating against you based on your gender identity.
There are steps that you must complete before a federal or state-level lawsuit could be filed. Those include filing a discrimination complaint with the federal Equal Employment Opportunity Commission.
When the commission affirms discrimination has occurred, employees can file lawsuits against their employers or other offending parties.
Philadelphia Employment Lawyers at Sidkoff Pincus & Green Fight Workplace Discrimination
If you are experiencing workplace discrimination of any kind, the Philadelphia employment lawyers at Sidkoff Pincus & Green can help to uphold your rights. You can call 215-574-0600 or contact us online to schedule an initial consultation at our Philadelphia law office. We represent clients who throughout Pennsylvania and New Jersey.
According to the Association of Certified Fraud Examiners, the three main types of fraudulent activity are theft, financial statement fraud, and misappropriation of assets. Small and midsize businesses are often more vulnerable to fraudulent activity and experience more damage than larger companies. As estimated 33 percent of businesses experience increases of fraud each year, frequently committed by employees, such as embezzlement, which results in loss of revenue and triggers involvement by the Internal Revenue Service.
To reduce fraudulent incidents, prevention and detection of fraud activity are crucial. All businesses should establish policies and procedures to prevent fraud, which is much easier than recovering losses following incidents of fraud. There are steps business owners can take to help protect against hackers, identity thieves, and cybercriminals, including:
- Divide accounts: Maintain separate business and personal bank accounts. This ensures that if thieves’ access one account, they will not have access to all of your accounts and drain all your funds at once. Maintain separate business and personal credit cards as well and protect card information.
- Separate accounting duties: Small businesses tend to operate with one employee handling all of the money-related duties, such as accounting, payroll, petty cash, and more. With only one person handle all of the finances for the entire business, embezzlement and fraud can occur over long periods of time without you noticing. Dividing the financial tasks between two or more employees helps safeguard the business funds.
- Protect data: Computer systems often leave us unprotected from thieves and fraudsters. Install anti-virus software and firewalls to help protect your company data and alert you of attempted breaches. Establish strict policies requiring employees follow company password requirements and change passwords every 60 to 90 days.
- Run background checks: When hiring, businesses need to bring on employees who are not only qualified, but trustworthy as well. Go beyond work history and references and perform background checks on potential employees once the list of candidates is reduced to five or less applicants. Know your current employees and business partners as well. Often the employee committing fraud is well-liked, works long hours, and takes on extra duties with little oversight.
- Establish internal controls: Businesses can create and maintain internal controls to detect or prevent fraud, such as access to inventory and financial data, and protocols requiring more than one person’s approval for overtime, check writing, payroll, accounting, and expense reimbursements.
- Review bank accounts: Regularly scrutinize bank accounts for any signs of theft or fraud. Pay particular attention to missing checks or those with out-of-sequence numbers, checks signed over to a third party, and payments to unknown people or businesses.
- Perform regular audits: Establish regular, routine and unscheduled audits for all departments handling accounting, cash, inventory, returns, refunds, and other financial duties.
- Train employees: Educate employees on fraud protection, how to detect fraud, and to report suspicious activity. Establish anonymous reporting to protect employees when reporting on a coworker and thoroughly investigate every report of suspected fraud.
- Install secure entries: Install time-stamped key-card security systems at entry points to monitor those entering and leaving the building and limit employee access to certain areas.
Additional, business owners can establish multi-factor authentication, which sends a secret code to your cell phone if your username or passwords have been compromised.
Philadelphia Business Lawyers at Sidkoff, Pincus & Green P.C. Help Companies Compromised by Fraudulent Activity
If your business has been compromised by fraud, the knowledgeable and experienced Philadelphia business lawyers at Sidkoff, Pincus & Green P.C. can help you fight back and regain control of what is rightfully yours. Call us at 215-574-0600 or contact us online to schedule an initial consultation. We are located in Philadelphia and serve clients throughout Pennsylvania and New Jersey.
Family businesses, also known as closely-held businesses, are owned, controlled, and often operated by a single family, whether it be siblings or parents and their children. It is common for these businesses to eventually be passed down to the next generation in the family.
When done correctly, transferring business ownership to your children can ensure security and income. When transferred incorrectly, it can jeopardize both the business and family relationships. The successful transfer of the ownership of your business to your child is complex and requires careful planning. The reality is, there are nearly as many ways to transfer a family business as there are types of businesses. It is important to have a thorough discussion with an experienced business lawyer who knows how to accomplish your goals with regard to your family and complete financial picture.
What Are Some Ways Businesses Can Be Transferred to Children?
There is no question that handling a family business is an essential part of planning your estate. The following are some ways a business can be transferred to your children:
- Include it in your will: You can simply put your interest in the business to your children in your will. This allows you to maintain complete control of the business for as long as you live, and your children to benefit from future ownership as they learn to manage the business. The downside to this route is the concern that as owners get older, they may not be able to fully run the company’s affairs. There are often tax advances to transferring all or part of the business while you are alive.
- Gift it now: You can give your children part or all of the business now. You may have to pay a gift tax, but the lifetime exclusion is large, so there may be little or no gift tax to pay, at least through the end of the year. A major advantage of gifting is that any future appreciation in the value of the business will be excluded from your estate, and not subject to estate tax when you die. A disadvantage is that your children’s tax basis in the business will be the same as yours today, rather than a “stepped up” basis, which would be equal to the value at the date of death if they inherited ownership.
- Sell to your children: Owners often want to transfer ownership while they are still living, but continue to receive income from the business. In these cases, a good option for owners is to sell the business to their children.
- Transfer the business to a trust: You may also sell or give an interest in the business to a trust for the benefit of your children. This is advantageous because it protects the children’s interest from creditors and ex-spouses. Other advantages to trusts are that they can help avoid capital gains tax on the sale of the trust assets, and avoid income tax on interest payments from the trust to the owner.
Many of the above options could be combined to meet your family business needs. If you have only one child, and that child is qualified and also wants to run the business, the transferring process is fairly straightforward. When none of these three things are the case, transferring family business ownership can become much more complicated. For these reasons, it is strongly recommended to work with a skilled business lawyer to ensure that your specific goals are met.
The Philadelphia Business Lawyers at Sidkoff, Pincus & Green Help Clients With Family Business Matters
If you are looking to transfer the ownership of your business to your children, the knowledgeable Philadelphia business lawyers at Sidkoff, Pincus & Green are here to assist you. Call us at 215-574-0600 or contact us online to schedule an initial consultation. Located in Philadelphia, we represent clients throughout Pennsylvania.
The use of contracts is standard and necessary practice among most businesses. When businesses allow lawyers handle major aspects of a company’s contracting process, or there is a contract management team to oversee the business portfolio, oversights that could have become problematic for businesses can be avoided.
Managing business contracts can be more complicated that many realize. It is easy for finer details to slip through the cracks when circumstances change without the contract being appropriately adjusted. When running a business or working on a specific project, it is essential to keep business contracts clear, up-to-date, and understood by all parties involved.
What Types of Business Contracts Need to Be Updated?
There are many kinds of agreements that businesses rely on to keep operations and projects running smoothly. Some types of business contracts that should be updated regularly include:
- Buy-and-sell contracts
- Client or customer agreements
- Commercial leases and real estate contracts
- Employment agreements
- Equipment leases
- Financial agreements, including loan documents
- Non-compete agreements.
- Non-disclosure and confidentiality agreements
- Privacy policies
- Service provider or supplier agreements
- Shareholder or partnership agreements
- Software licenses
- Website contracts
Why Should Business Contracts Be Regularly Updated?
Even when business contracts and related agreements are drafted by a lawyer, they still to remain living, breathing documents. A document that gets written for a business today may not always be the document needed tomorrow, as neither business nor laws are stagnant. The terms and conditions of a business contract need to evolve and vary with the growth and development of the company.
When renewing a company’s terms and conditions in a business contract, consideration should be given to the following:
- Any verbal arrangements in place
- Implied terms of the contract
- Regulation and legislation with regard to provision of services and compulsory disclosures to customers
- Industry practices and professional best practice rules
- Company policies
It is crucial for businesses to review and renew their contracts regularly to ensure that terms and conditions reflect a company’s current operational feasibility, business arrangements with customers, and regulatory standards in place for businesses.
Terms and conditions of contracts enhance businesses and provide legal protections should any problems arise. There are several reasons companies should continuously update their business contracts, including the following:
- Keeps company compliant with laws and regulations
- Minimizes and manages dispute risk
- Provides alternative methods to mitigate litigation risk, such as arbitration or mediation dispute resolution
- Protects company’s intellectual property
- Limits company’s liability and reputational risk
- Sets expectations, securing a valuable working relationship
How Often Should Business Contracts be Updated?
How often certain contracts should be reviewed and updated can vary depending on the nature and scope of each agreement. The following is a general guideline as to when to update different kinds of business contracts:
- Every two years: Not many business documents only need to be updated occasionally, but there are a few. Company contracts, such as operating agreements and other general records, usually fall into this category. Certain situations may necessitate a specific review prior to the two-year mark, such as the departure of a partner or change in ownership.
- Annually: The general rule is, that when in doubt as to when a business contract should be reviewed or updated, the safest practice is once a year. Multiple agreements have one-year terms, including leases, licensing contracts, non-disclosure, or confidentiality agreements.
- Biannually: Some contracts need to be reviewed more frequently than the most common one-year mark. Financing and professional service agreements warrant additional oversight to ensure the company is on track to fulfill all obligations. Professional services contracts can often involve substantial fee agreements with accountants or attorneys, so companies should check that they are getting an appropriate value.
- Quarterly: the increased frequency of quarterly contract reviews can catch matters that could lead to bigger issues. Quarterly assessments can also be necessary for budgeting and reporting purposes like payroll and tax matters.
- Monthly: Some business contracts are simply of a short duration, of an extremely high value, or with relatively unreliable partners. These types of contracts require diligent oversight and frequent communication.
All updates to business contracts should be discussed, agreed upon, and signed by every involved party. Hiring a knowledgeable Philadelphia employment lawyer can help your business avoid serious problems like breach of contract. Having a skilled employment lawyer by your side can ultimately save you time and money, a civil lawsuit, and the reputation of your company.
Philadelphia Employment Lawyers at Sidkoff, Pincus & Green Protect Clients and their Business Contracts
Reach out to one of our accomplished Philadelphia employment lawyers at Sidkoff, Pincus & Green for all your legal business needs. Call us today at 215-574-0600 or contact us online for a free consultation. From our office in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.