Category: Business Law

Legal Issues to Consider When Selling a Business

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Philadelphia Business Lawyers Helping those looking to sell their business

There are many issues that need to be discussed and agreed upon when selling a business, but a lawyer can help. If you are thinking about selling your business, you should speak to a lawyer who can put together all the needed documents and perform other tasks. The following includes some common legal issues you may encounter when selling your business.

Business Type

How the business is structured or organized will dictate how complicated the sale will be and what issues have to be addressed. If it is merely a sole proprietorship owned and operated by one person, then these transactions are fairly simple. However, the business could be structured as a partnership or a limited liability company.

If it is a partnership or limited liability company with several owners, everyone who is a part owner of the company has to agree to the sale and all terms. Corporate level meetings would have to take place, and a resolution of sale would need to happen, which is where everyone’s vote is recorded.

Tax Issues

Every sale of a business should be reviewed by an certified public accountant or business tax specialist so the parties understand the tax consequences of the sellers and the buyers. You should not rely solely on the lawyers handling the drafting of the sales documents. With many complicated business purchases, you may want to have a written certification from an accountant detailing the tax consequences as part of the entire purchase terms.

Due Diligence

Due diligence is a legal term that describes the process of researching and investigating every important aspect of a business before and during the purchase process. Usually, the buyer will request information, documents, data, and other things in order to confirm aspects of the business. The information and data will include the following issues:

  • Financial books, including receivables, loans, financial obligations, balance sheets, payables, incomes statements, and past tax filings.
  • Legal agreements and contracts.
  • Information on employees, including any employment contracts, salaries, benefit agreements, union contracts, and potential legal issues, such as wrongful termination or discrimination lawsuits.  A lawyer will help you avoid business litigation.
  • A current inventory.
  • The company’s reputation in the community and business world, including social media posts and campaigns.
  • The current advertising campaigns.
  • Any environmental issues related to the property that the business owns.

Philadelphia Business Lawyers at Sidkoff, Pincus & Green P.C. Help Clients Who are Selling a Business

Selling a business can be stressful, but we can help. Our Philadelphia business lawyers at Sidkoff, Pincus & Green P.C. can help you avoid legal issues when you are selling your business. We will make sure everything is in order. Call us at 215-574-0600 or complete our online form for an initial consultation. We are located in Philadelphia, and we serve clients throughout Pennsylvania and New Jersey.

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Why Do I Need a Lawyer for My Small Business?

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Lawyer Small Business

When a business is just getting off the ground, it can be tempting for a business owner to forgo unnecessary expenses. Oftentimes, having a lawyer on hand can seem like a superfluous use of limited financial resources. In other cases, engaging the services of a lawyer can prove to be an incredibly cost-effective business decision.

Many business owners who run into legal problems tend to wish they had a relationship with a lawyer they trust. It is worth meeting with a lawyer to get their take on what issues you might encounter and what services they may have to offer.

There are many reasons why having a lawyer might benefit a small business. Making choices about which items do and do not need a lawyer can be vital to keeping costs in check.

Budgeting

Many law firms offer legal services from a customizable menu of options that range from simple legal advice to complex business tort litigation. Having these options can allow small business owners to prioritize their legal needs and optimize the use of their business’s limited budget. A lawyer can also help with:

  • Financials: A small business owner that wants to ensure that any transfer or allocation of funds is handled in accordance with applicable laws might want to discuss the plans with a lawyer.
  • Buying or selling:  Business owners who are in negotiations to sell their business or to buy another company should involve a lawyer in the transaction.

Litigation

While it may not be necessary for every small business to have a lawyer on staff, there are several issues that should always be handled by one. These include:

  • Lawsuits: When former, current, or prospective employees sue, allegations of unfair hiring practices, employment discrimination, a hostile work environment, or other injustices can severely damage a small business.
  • Investigations into legal violations: A business that is being charged with breaking a law.
  • Environmental complaints: A small business that is being blamed for pollution or another type of environmental problem should have a lawyer handling the issue.

Tackle Small Business Issues

Outside of the legal issues listed above, there are also many business matters that may be handled without the help of a lawyer; however, seeking the help of a lawyer is generally recommended to ensure the business is protected. These small business issues may include:

  • Deciding how to organize the company
  • Partnership agreements
  • Corporate bylaws
  • Contracts
  • Labor laws
  • Real estate agreements
  • Licensing
  • Registration for tax purposes
  • Intellectual property protection

Philadelphia Business Lawyers at Sidkoff, Pincus & Green P.C. Handle All Legal Matters for Small Business Owners

When it comes to certain business-related legal issues, it can be vital to have the help of a knowledgeable lawyer. Our Philadelphia business lawyers at Sidkoff, Pincus & Green P.C. can assist with business matters. Call us at 215-574-0600 or contact us online for an initial consultation. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.

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Pennsylvania Supreme Court Strikes Down No-Hire Clauses

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No-Hire Clauses

On April 29, 2021, the Supreme Court of Pennsylvania decided that businesses could not enforce overly broad no-hire clauses and non-compete agreements entered into with other businesses. The ruling in Pittsburgh Logistics Systems, Inc. v. Beemac Trucking, 2021 WL 1676399 (Pa. Apr. 29, 2021) determined that companies cannot block employees from taking jobs with other companies via non-compete agreements that are created in business contracts between the two businesses. This creates a new precedent that resembles similar rules in neighboring states, like New Jersey.

At the heart of this case was the contract the two companies signed in 2010 that made Pittsburgh Logistics Systems, Inc. (PLS) a non-exclusive partner of Beemac Trucking (Beemac) to haul the freight of the former’s clients. PLS included non-solicitation and no-hire clauses, attempting to retain workers. However, Beemac still hired four of PLS’s employees. PLS then filed suit an sought an injunction to enforce the non-solicitation and no-hire provisions of the contract. The trial court denied PLS’s request for an injunction, and held that a no-hire provision in commercial contract between two companies violates public policy and is therefore unenforceable under Pennsylvania law. The Superior Court, sitting en banc, affirmed the trial court’s decision. The Supreme Court of Pennsylvania, narrowly affirmed the lower courts’ rulings, finding that, in this case, the contract between PLS and Beemac was overly broad because Beemac was precluded from hiring any PLS employee during the term of the contract and two years after regardless of whether the PLS employee had worked with Beemac during the term of the contract.

How Does This Ruling Affect Employee Rights?

In Pennsylvania, employees must consent to non-compete or no-hire clauses. Usually this happens when signing an initial employment contract. Employers must disclose the terms of the clauses upon entering the agreement. In this case, when the two companies entered their business contract in 2010, the employees of both were not parties to the deal. Without notifying the employees or gaining their consent, the non-compete agreement is voided. Had there been some input from the employees or some compensation promised by Beemac if they decided to hire PLS’s workers, that may have kept the contract clauses valid.

Since the language of the contract attempted to cover all of PLS’s employees, not just those working on matters related to Beemac and the business deal, the Court also found that to be too broad. The length of the non-compete clause, which extended two years beyond the established one-year term of the deal, was also found to be problematic.

The Court’s ruling put a spotlight on larger concerns, like the free competition for employees and the overall harm to the public. While acknowledging that PLS had an interest in retaining talent, the decision noted that the clauses went beyond the scope of protecting that interest. Instead, it not only violated established state laws, but it created a probable harm to the public good. The Court determined restraining trade and limiting the labor market took importance over PLS’s interests as an employer.

This ruling could have significant impact as more people return to the workforce as the Coronavirus (COVID-19) shutdowns end and more businesses seek normalcy. While employers try to entice those unemployed back to jobs, this has started to create bidding wars that benefit workers.

For those offered new deals, it is important to scrutinize these contracts. Know the terms of employment, especially any non-compete agreements, that may preclude leaving for another position with better pay, conditions, or other arrangements.

Philadelphia Employment Lawyers at Sidkoff, Pincus & Green P.C. Help Negotiate Business Contracts

Contract negotiations can be confusing and stressful. Even for well-prepared professionals who know their values, there can be concerns. A trusted Philadelphia employment lawyer at Sidkoff, Pincus & Green P.C. can protect your interests. Call us at 215-574-0600 or contact us online to schedule an initial consultation. Based in Philadelphia, we proudly serve hard-working residents throughout Pennsylvania and New Jersey.

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How Do I Avoid Fraud as a Business Owner?

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Fraud

If you own a business, there is a great possibility that you are going to encounter an issue of fraud. When you do, it is going to be paramount that you understand how to mitigate any monetary damages, along with associated risks that your company’s reputation may suffer in the process.

Your best defense against fraud will be your ability to be knowledgeable on the subject. Being aware of what signs to look for can help your business avoid the pitfalls of scams. Listed below are compiled tips to help avoid business tort litigation involving fraud.

Tactics Employed by Scammers

A great way to deter fraudsters from coming after you is to try and understand their methods of operation. Fraud usually occurs because a scammer is able to build a foundation of trust that will provide them an avenue to get the information they need to gain access to your company. 

Another tactic they use is creating a fast-paced environment that forces you to make quick decisions without any research. Scammers will use fear and intimidation to get their way and con you out of money by having you send them payments that are untraceable. Often, these payments involve wire transfers, digital currency, reloadable cards, or gift cards, making them difficult to track.

Protect Your Business

Inform your employees that you have a plan to deal with potential fraudsters who may be trying to con your business. Encrypt passwords and never send sensitive information through emails that can be siphoned by scammers. Build a rapport with your employees, especially those that interact with finances. You are putting a lot of faith in employees who handle accounting duties, and you should run thorough background checks on them.

When paying bills, make sure that you can verify invoices, payments, and other expenses. Go over the way you handle payments with anyone on your staff who is authorized to sign off on your behalf, and stick to the system at all times. Delegate accounting duties to at least two people within your company to avoid having one person having total access to the books.

Nowadays, a lot of fraud occurs online, so it is in your best interest to be technologically proficient. Never open an email that may contain attachments of files that could contain malware that will attack your computer systems. Hackers can also damage your standing in the community by intercepting your social media accounts and relaying malicious information. In an effort to minimize risks, secure your company’s files, passwords, and financial information.    

You can also protect your business by implementing a mandatory vacation schedule and instituting a medium, whether through email or phone, where a fellow employee can anonymously report any suspicious activity.

Philadelphia Business Lawyers at Sidkoff, Pincus & Green P.C. Help Business Owners Avoid Fraud

When you put effort into running an effective business, nothing can be more disheartening than someone threatening your livelihood. Fraud can seep into all aspects of your business and derail your operations. However, our Philadelphia business lawyers at Sidkoff, Pincus & Green P.C. can help you. Call us at 215-574-0600 or complete our online form for an initial consultation. We are located in Philadelphia, and we serve clients throughout Pennsylvania and New Jersey.

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What are the Paycheck Protection Program Loan Updates?

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Paycheck Protection Program

In 2020, the federal government approved a $900 billion relief package due to the Coronavirus (COVID-19) pandemic. This package included the Economic Aid Act to help small businesses, nonprofits, and venues keep their companies running. Essentially, the Economic Aid Act made billions of dollars available to entities under the Paycheck Protection Program (PPP) in the form of low-interest loans through selected lenders. Those granted loans could then apply for loan forgiveness within 10 months from the end of their covered loan period.

It is important to note that the PPP ended on May 31, 2021, when the Small Business Administration (SBA) announced that funding had been exhausted. The information that follows is meant to help current loan grantees better understand the nuances of their loans and how to apply for forgiveness.

First or Second Round of the Paycheck Protection Program

Certain loan grantees may qualify for a second draw loan of up to $2 million. To meet the requirements, the organization must have fewer than 300 employees, used or will soon use the entire amount of the first loan, and has a decline in gross receipts of at least 25 percent in any quarter of 2020 when compared to the same quarter of 2019. Economic Injury Disaster Loan (EIDL) advances received by borrowers are no longer deducted from their PPP loan forgiveness amount.

New Business Entities

New business entity types became eligible to apply for PPP loans in the second round, including:

  • Chambers of commerce
  • Trade organizations
  • Nonprofits or government instrumentalities that engage in destination or tourism
  • Owners who are delinquent on student loans
  • Noncitizens who are U.S. residents
  • Owners with non-fraud related felony convictions

Like the first round, the second round continues to include these eligible entities:

  • Self-employed
  • Sole proprietors
  • Independent contractors
  • Seasonal businesses
  • Nonprofit organizations
  • Housing cooperatives
  • Veterans organizations

The first PPP round required funds to be used for expenses, such as rent, payroll, utilities, employer-sponsored health insurance, and other eligible costs. The second round still includes these plus additional forgivable expenses:

  • Operational expenses:For Human Resources, accounting software, and cloud computing.
  • Property damage: Costs related to public disturbances in 2020 not covered by the organization’s business insurance.
  • Supplier costs:For payments made to suppliers before receiving the PPP loan needed to keep the business running.
  • Worker protection costs: COVID-19 worker safety expenses, facility modifications, and supplier costs related to COVID-19 protections.

Current PPP Loan Forgiveness Requirements

The following requirements from the first round and later are still in effect:

  • The loan must be used to cover payroll costs and other qualifying expenses over the eight- to 24-week period after the loan is made.
  • The borrower can choose a covered period from eight to 24 weeks and submit the forgiveness application before the end of the 24 weeks if they use PPP funds early.
  • Employee staffing and compensation levels must be maintained for loans greater than $50,000. PPP loans under $50,000 are exempt from workforce and wage reductions.
  • Borrowers are eligible for full loan forgiveness if they use at least 60 percent of loan proceeds for payroll expenses, with no more than 40 percent going to qualifying expenses unrelated to payroll.

If a business is experiencing loan issues, it is advisable to speak to a lawyer. A lawyer can assist with business tort litigation matters.

Philadelphia Business Lawyers at Sidkoff, Pincus & Green P.C. Help Business With Loans

PPP loans and other government-sponsored programs can be complex. Requirements change often, and businesses need to try to stay on top of them or risk not following the correct procedures. A Philadelphia business lawyer at Sidkoff, Pincus & Green P.C. can address your concerns. Contact us online or call us at 215-574-0600 for an initial consultation. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.

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Pennsylvania Supreme Court Strikes Down No-Hire Clauses

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hire-clauses

Earlier this month, the Supreme Court of Pennsylvania decided that employers could not enforce overly broad no-hire clauses and non-compete agreements. The ruling on Pittsburgh Systems, Inc. v. Beemac Trucking determined that companies cannot block employees from taking jobs with other companies via non-compete agreements that are created in business contracts. This creates a new precedent that resembles similar rules in neighboring states, like New Jersey.

At the heart of this case was the contract the two companies signed in 2010 that made Pittsburgh Logistics Systems, Inc. a non-exclusive partner of Beemac Trucking to haul the freight of the former’s clients. Pittsburgh included non-solicitation and no-hire clauses, attempting to retain workers. However, Beemac still hired four of Pittsburgh’s employees. The Court ruled that this was acceptable, as the terms of the contract were too broad and did not directly involve the affected employees. This creates a risk to public harm and restraints on trade and free labor, which the Court determined outweighed any concern or interest Pittsburgh had for keeping their employees.

How Does This Ruling Affect Employee Rights?

In Pennsylvania, employees must consent to non-compete or no-hire clauses. Usually this happens when signing an initial employment contract. Employers must disclose the terms of the clauses upon entering the agreement. In this case, when the two companies entered their business contract in 2010, the employees of both were not parties to the deal. Without notifying the employees or gaining their consent, the non-compete agreement is voided. Had there been some input from the employees or some compensation promised by Beemac if they decided to hire Pittsburgh’s workers, that may have kept the contract clauses valid.

Since the language of the contract attempted to cover all of Pittsburgh’s employees, not just those working on matters related to Beemac and the business deal, the Court also found that to be too broad. The length of the non-compete clause, which extended two years beyond the established one-year term of the deal, was problematic.

The Court’s ruling put a spotlight on larger concerns, like the free competition for employees and the overall harm to the public. While acknowledging that Pittsburgh had an interest in retaining talent, the decision noted that the clauses enforced went beyond the scope of protecting that interest. Instead, it not only violated established state laws, but it created a probable harm to the public good. The Court determined restraining trade and limiting the labor market took importance over Pittsburgh’s interests as an employer.

This ruling could have significant impact as more people return to the workforce as the Coronavirus (COVID-19) shutdowns end and more businesses seek normalcy. While employers try to entice those unemployed back to jobs, this has started to create bidding wars that benefit workers.

For those offered new deals, it is important to scrutinize these contracts. Know the terms of employment, especially any non-compete agreements, that may preclude leaving for another position with better pay, conditions, or other arrangements.

Philadelphia Employment Lawyers at Sidkoff, Pincus & Green P.C. Help Negotiate Business Contracts for Workers

Contract negotiations can be confusing and stressful. Even for well-prepared professionals who know their values, there can be concerns. A trusted Philadelphia employment lawyer at Sidkoff, Pincus & Green P.C. can protect your interests. Call us at 215-574-0600 or contact us online to schedule an initial consultation. Based in Philadelphia, we proudly serve hard-working residents throughout Pennsylvania and New Jersey.

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What are the New Regulations Under the Corporate Transparency Act?

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At the start of the new year, the U.S. Senate voted to override former President Trump’s veto of the National Defense Authorization Act of 2021. With this development, important amendments to the United States anti-money laundering law (AML) took effect. Among these regulations is the Corporate Transparency Act (CTA), which is a set of important provisions designed to discourage “shell” companies and reduce corporate corruption in all sectors.

One of the most significant provisions included in the CTA is the requirement that all businesses file beneficial ownership information with the Financial Crimes Enforcement Network (FinCEN). This fundamental transparency stops criminals and illegitimate entities from using anonymous shell companies to hide illegally gained funds.

Key Provisions of the CTA

Under the CTA, businesses operating in the United States must submit the following information every year for each beneficial owner to the FinCEN:

  • Legal name;
  • Date of birth;
  • Address; and
  • Unique identification number, such as information from a driver’s license or passport.

It is worth noting that while reporting this information to the FinCEN is mandatory, there are strict rules about how this data is stored, used, and distributed. While banking and government agencies are permitted to access beneficial owner records, the general public is not.

Several types of employees are exempt from being beneficial owners. Most beneficial owners are individuals who directly or indirectly maintain substantial control over the business or own or control at least 25 percent of the ownership interests in a business.

Does the CTA Apply to Every Business?

The CTA applies to corporations, limited-liability companies (LLCs), other related entities, and new businesses as they form. Large companies, which are generally already heavily regulated and currently reporting to other government agencies, may be exempt from the CTA. Exempt businesses include those with more than 20 employees with revenues over $5 million, most financial institutions, including banks and credit unions, and churches and other nonprofit organizations.

What Does the CTA Mean for My Business?

Businesses that do not comply with CTA provisions face civil penalties of up to $500 per day until compliance is met and criminal fines of up to $10,000 and possible jail time. For this reason, it makes sense for every business owner to consult with a skilled business attorney in their area.

An experienced business attorney can explain the CTA in great detail, help with business tort litigation matters, assess how their client is impacted by the new transparency guidelines, and take steps to ensure they are in full compliance going forward.

Philadelphia Business Attorneys at Sidkoff, Pincus & Green P.C. Ensure Clients Comply with Regulations and Avoid Costly Penalties

There is always a learning curve when it comes to understanding and implementing new business regulations. A seasoned Philadelphia business attorney at Sidkoff, Pincus & Green P.C. can take the guesswork out of navigating new legislation so you can focus on growing your business. To learn more about your case and an initial consultation, call us at 215-574-0600 or contact us online. Based in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.

What are the Legal Considerations for a New Trademark?

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Starting or growing a business comes with many legal considerations. A major component is branding the new venture with a trademark to provide identification. However, with more of the marketplace globally available, it can be challenging to find something that resonates with the business. Small business owners should not impulsively decide. Business owners should invest in researching the industry or product territory both locally and online to avoid resembling competitors.

Completing a trademark search will help identify potentially competing ideas and brands that will help the process. Having a unique last name or combining words can avoid common legal pitfalls. More common names or brands may appear if they are not directly competing in the same sector. Using an established name may create additional challenges, but it is not completely forbidden.

Check social media to see what potential competitors use with trademarks and general branding strategy. Social media platforms have become more vital in building new companies. App stores would be a good place to find brands with similar names and functions. There are also common law databases available for regional companies who entered the marketplace and have done business with a trademark but did not file nationally.

What Should Business Owners Avoid?

The following are some suggestions on what to avoid in creating a new trademark:

  • Being too similar phonetically to other trademarks.
  • Being too visually similar to other trademarks.
  • Being similar to brands with a record of challenging trademarks in court.
  • Coincide with any legal precedent that would warrant a legal challenge.

The U.S. Patent and Trademark Office has videos and other online resources to help companies avoid common mistakes in creating a trademark and expedite the approval process.

What Should Companies Do While Applying for a Trademark?

The application for a trademark will require a physical manifestation of the new mark, both in basic logo form and on apparel or marketing materials. Make sure the wording and illustration are distinctive enough to uniquely identify the brand for consumers.

Rights to a trademark go to the first company to use it in a specific field or region. However, federal registration can allow a company who does not file first to be the owner of a mark or brand name. While the process is long and costly, it may be beneficial long-term for a company to register federally. Locking in usage requirements happens when either a brand comes to market for sale, or the promotion of the brand is used through printed or digital resources. This works best for a consistently marketed or sold product or service. A trademark that is not used for about three years may lose its rights.

If applying, business owners should make sure to follow up with any questions or challenges that may be posed to try to avoid complex litigation issues. If anything arises, the legal process can take months or longer if it is not properly vetted and all procedures are followed.

Philadelphia Business Attorneys at Sidkoff, Pincus & Green P.C. Help Business Owners with Trademark Applications and Disputes

There are many considerations while forming a trademark for a new company. The U.S. Patent and Trademark Office strongly encourages using a licensed attorney with trademark law experience to help with the process. A Philadelphia business attorney at Sidkoff, Pincus & Green P.C. can help your company and defend your new trademark application. Call us at 215-574-0600 or contact us online for an initial consultation. Based in Philadelphia, we serve clients throughout Pennsylvania and South Jersey.

What are Common Legal Issues that Businesses Face?

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Managing a successful small business can be a lot of work, especially in the early stages, when many difficult financial decisions must be made. The biggest ones pertain to what owners plan to spend their limited budget on. Given that resources can be tight, it is understandable why some elect to avoid some big-ticket items, like hiring a lawyer. While that may seem to make sense in the short-term, it could wind up costing the company much more in the long run. There are several common problems that impact all companies that a knowledgeable lawyer would be able to help the firm avoid.

Do I Have the Right Structure for My Business?

One of the first things that an entrepreneur and their partners must decide on is the structure of their business. This is extremely important because it could have serious tax liability issues. Establishing the correct structure will save a company several severe headaches going forward. Some of the different types of structures include:

  • Sole proprietorship
  • Partnership
  • Limited Liability Company (LLC)
  • C-Corporation
  • S-Corporation

Each one of these structures handles the liability and tax responsibilities of the owner in a different way. An LLC, for instance, separates the two and treats them as two different entities. Owners should research the different corporate structures thoroughly before deciding on which to choose.

What are Some Employee Issues I Need to Consider?

Even if the structure of the company is secure, another common problem that all companies deal with is managing employees. One of the biggest aspects of that is deciding how to classify them and verifying that their classification matches their level of responsibility. There are three main types of classifications, which are:

  • Full time employee: This type of employee is someone who works more than 30 hours a week. The company is obligated to offer health insurance, Workers’ Compensation, and other benefits.
  • Part time employee: These employees work a maximum of 30 hours a week and are usually not eligible for benefits, although a company can offer them if it elects to.
  • Independent contractor: This is a person who operates outside of the structure of a particular office and works independently. They are responsible for paying their own Medicare and other taxes, and are not eligible for some universal benefits, like Workers’ Compensation.

Deciding how to classify employees can be a tricky action, as misclassifying someone can lead to litigation later on. The best way to avoid any problems is to evaluate a job description ahead of time and decide what the hours and responsibilities will be, then classify the position based on the added costs of potentially paying for benefits.

If that position cannot be fully funded, the company may have to do without it until it can find the funding somewhere else to pay for that position. The legal costs further down the road are not worth cutting any corners with a person’s pay or benefits.

What Type of Paperwork Should I File on a Regular Basis?

Maintaining a business is more than just keeping employees and customers happy. There is a significant amount of paperwork that must be filed with both the state and the federal government on an ongoing basis. If a firm is publicly held, it could fall under the jurisdiction of the Securities and Exchange Commission (SEC) on the federal level and state regulators. Regardless, the company will be under an obligation to file certain documents, including:

  • Financial statements: These documents contain a snapshot of the firm’s financial status, including its income statement, balance sheet, and statement of cash flow.
  • Financial information: Any data that the company chooses to post about itself on its website.
  • Annual reports: These are issued to shareholders once a year.
  • Prospectus: A document that describes the investment offering for the public.

What Should I Do if I Have a Contract Dispute?

While contracts are supposed to be binding agreements between two or more parties, there can be disagreements between those parties over one’s actions. It may also be necessary to break a contract because the two sides no longer wish to work together anymore. To avoid a messy legal dispute, it is best to thoroughly review any contract before signing it. All parties should include language that grants them an easy escape should certain violations take place, or some other action occur, such as one of the two sides is arrested or has some other public embarrassment.

Philadelphia Business Lawyers at Sidkoff, Pincus & Green P.C. Help Small Businesses with Legal Matters

If you are facing legal hurdles within your small business and need help finding a legal remedy, reach out to the Philadelphia business lawyers at Sidkoff, Pincus & Green P.C. For an initial consultation, call us at 215-574-0600 or contact us online. Located in Philadelphia, we serve clients throughout New Jersey and Pennsylvania.

Should I Pass the Family Business to the Next Generation?

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There are about 5.5 million family-owned businesses in the U.S., caccording to advocacy group, Family Enterprise USA. Therefore, many business owners need to decide if, how, and when they will pass on their business to the next generation. The best way to ensure a smooth transition and successful business continuation is to have a succession plan. Business owners should develop the plan with input and support from all family members who have an interest in the business. However, that leads to the question of who should inherit the family business?

Sometimes there are no children to inherit the business. Other times, children do not want to inherit the business, and there are no other relatives or close friends they trust. Still, other business owners do not want to retire, and by the time they do, potential new owners have moved on. Before business owners can develop a succession plan, they need to get buy-in from those they want to inherit the business. The next generation of owners could be children, relatives, friends, or other business owners. Acceptance and support from all potential new owners are crucial before developing a succession plan. If children will inherit the family business, consult with a lawyer about an estate plan as there may be tax and equity considerations.

Why Does a Family Business Need a Succession Plan?

A good succession plan will detail plans for a business when the current owner retires, or if the unexpected occurs, such as a death or disability of the owner. Sadly, a business could simply die out without a solid plan for continuance in place. The business could also be lost to estate and inheritance taxes without a plan that addresses tax issues. If there is no clear plan in place for ownership transfer, family issues could harm both the business and family relationships. A succession plan will cover the details of how and when the transfer will occur, associated costs, a business valuation, and how the transfer will be financed.

What Does a Business Succession Plan Include?

A succession plan must include the right people, such as a business lawyer, accountant, financial advisor, business valuation expert, CFO, and all family members and others who will have a role or financial interest in the transferred business. Every business situation is unique and will require different plans. A succession plan should address the following in detail:

  • The mission, vision, guiding principles, and values agreed upon by the current owner and all successors.
  • A timeline of important personnel transitions, business deadlines, events, projects, and plan implementations.
  • Identify strengths, weaknesses, and development plans for each candidate, in addition to responsibilities and management expectations.
  • A business valuation, stock or other equity positions, sales and growth expectations, as well as budgets, business debts, and other important financials.
  • The types of insurance that need to be acquired, renewed, changed, or stopped.
  • A summary of operating procedures, including processes, policies, partners, vendors and suppliers, products and services, new projects, training, IT, human resources, customer and client demographics, and marketing/sales plans.
  • A communications plan stating how employees, business partners, customers and clients, the community, and local media will hear about the transition.

Creating a succession plan for the family business is a complex task that requires the expertise of trained professionals. Passing the torch to the next generation can go smoothly with the right people helping business owners.

Philadelphia Business Lawyers at Sidkoff, Pincus & Green P.C. Help Business Owners with Succession Plans

If you are considering passing on your business to a family member, relative, friend, or another business, a business succession plan can help make it a smooth transition. Contact a Philadelphia business lawyer at Sidkoff, Pincus & Green P.C. today. We pride ourselves on staying abreast of all developments in business law and business succession planning. Contact us online or call us at 215-574-0600 for an initial consultation. Located in Philadelphia, we serve clients throughout Pennsylvania and New Jersey.

  Category: Business Law
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