Attorneys for Business Owners Selling Their Businesses in OhioWhen you are selling your business, you need a law firm that can work with you to minimize risks and maximize your gains from the sale.
You've worked hard to build your business. If you've been approached by a prospective buyer or you are otherwise looking to sell, then you need to partner with a business attorney who can guide you through the process of selling your business and through closing.
Selling Share of Ownership versus Selling the Whole BusinessIf you are one of a few owners of a business and you are simply trying to sell your shares, then there are some legal considerations that are different than if you are selling the whole business. First, an attorney would want to know if you have a buy-sell agreement. If so, then that document will dictate how the sale will go. If not, then the terms of the sale need to be negotiated between the seller of the business, the purchaser, and the remaining owners. This will involve finding a fair price on a per share value.
If the business ownership stake is going to be passed along to your children, or other family member, then the proper business succession planning arrangements should be made between yourself and your business attorney. Business succession planning can (and ideally should) be set up years before you actually sell your ownership stake.
Selling the Whole BusinessIf you are selling the whole business, then the gist of what needs to be done is for you to minimize your liabilities and maximize your sale price. You will want to meet with an attorney experienced in business sales in Ohio in order to make sure that you are properly protecting yourself from potential liabilities. The sale of a business can be structured in a number of imaginative ways. It is usually in the seller's best interest to defer as much of the cost of the sale as possible on the buyer of the business. This usually means that you would have the buyer's attorney outline the initial terms of the purchase of the business. However, whoever writes the terms of the business sale will write those terms in their favor, so you will need your own attorney to negotiate on your behalf or to write your own contract.
Need a Business Law Firm? Harris & Engler Helps Ohio Business Owners and is Located in Columbus OhioThe attorneys at Harris & Engler have extensive experience helping Ohio business owners with a full range of legal service for their needs. If you need an attorney for your business in Columbus, Delaware County, or elsewhere in Ohio then you can speak with an experienced business attorney today by calling (614) 610-9988.
Every Business Needs a Good Partner for Their Legal NeedsSome of Delaware County Ohio's largest employers operate in the health care, manufacturing, transportation, IT, and technology industries. Delaware County is also a great place for small business owners to locate their businesses. It is important for Delaware County business owners to have a partner that they trust for their legal needs. The law firm of Harris & Engler is a law firm conveniently located for Delaware businesses. Columbus and Delaware County businesses have a network of innovative legal solutions when partnering with Harris & Engler for their legal needs. Whether your needs are in contract, employment issues, or litigation issues, an attorney at Harris & Engler can work to help you achieve your goals.
The law firm of Harris & Engler helps businesses get started with a solid framework, helps with corporate documentation and governance issues, employment contracts, acquisition and selling your business, and for lawsuits filed against businesses and on behalf of businesses. You can call an attorney at Harris & Engler to work with your Ohio business at (614) 610-9988.
The Importance of Having an Attorney Review and Prepare Your Business ContractsBusiness contracts are the rule of law between the people or businesses that enter into the contract. To a certain extent, if you draft a business contract, then you get to make up your own rules and determine what the law is for the person signing the agreement. If you have to go to court over a contract dispute, then the rule of the court is to enforce the contract as it is written. That is why it is important to know what you're signing or to have an attorney draft your business contract for you.
Do I Really Need an Attorney to Write or Review my Contracts?Attorneys are expensive. Do you really need an attorney to draw up that contract or review the contract you've been given? If cost is the primary concern, then you are much more likely to walk yourself into a bad deal.
You may be thinking that you don't need an attorney to review your contract. It is written in English after all, and you understand English, so you can read and understand the contract yourself, right? Although your contract may be written in English, it is chock full of legalese, which often times is actually written in a different language (Latin). Business contracts are full of clauses and terms that have a special meaning under the law. You simply don't know what you don't know, so a non-lawyer would have no idea what to even look for. If there's any real money at stake under the contract, then you owe it to yourself to have it looked over by a business contract attorney. Business contract attorneys are not as expensive as you may think. For some types of contracts, the price you might pay your own attorney to draft the contract could be comparable to the price to purchase a ready-made contract from an online legal company.
The Pitfalls of Using Contracts You Find or Purchase OnlineYou can find examples of most types of business contract for free online. You can also find dozens of online legal form companies to purchase a contract. You may even be able to customize your contract a little bit with some of the online legal form companies. The problem is that a non-attorney deosn't know enough information to know if the contract they're getting is good or not. When you purchase a form contract from an online legal form company, you are purchasing a product the quality of which is unknown from a company organized for the purpose of maximizing profit from people like you. If you hire an actual contract attorney, then that attorney has a legal obligation to only take actions and perform work that benefits you (called 'fiduciary duty'). An attorney will make sure that your contract truly protects your interests and is actually tailored to the appropriate law. You will have someone to actually talk to if you have questions. If the value of the underlying contract is less than $1,000, then it may make more sense to use a contract that you found online. If the value of the underlying contract is more than $1,000, then you probably owe it to yourself to either have an attorney write your contract or look over the one you've got to make sure that you understand what you're getting into and to advise you and protect your interests.
Ohio Business ContractsIf you're looking for a contract, then take the guess work out of whether you're getting a good contract or not and call an attorney. The attorneys at Harris & Engler provide exceptional quality and cost effective pricing for business and individual contract needs in Ohio. The law firm of Harris & Engler is located in Columbus, Ohio, and its business attorneys help individuals and businesses all across Ohio.
Ohio Business Owners Often Move Forward in Operating their Businesses Without Knowing Some Key Areas of Liability ExposureSmall business owners are the driving force of the economy in Ohio. Most business owners operate in "go mode" and simply keep moving things forward and putting out fires as they come. While that mentality can be very conducive to success in business, it can also lead to legal issues from long ignored or unknown problems.
The most common ignored or unknown problem for business owners in Ohio is that the company was never properly set up. You start a Corporation or Limited Liability Company (LLC) in order to limit your personal liability as a business owner. If something goes wrong, then it is only the assets of the company that are at risk, not the assets of the owner themselves. That is the goal at least. The problem usually arises when someone forms the company themselves or with an online forms company or online business registration company.
Many people who start their own businesses think that all you have to do to start a business is pay the filing fee with the Ohio Secretary of State and file the articles of incorporation. While technically that is true in that your business is officially formed after filing with the Secretary of State, you do not have all of the "limited liability" protections just by filing with the Secretary of State.
Most people that start their own business and register it with the Secretary of State themselves will carry on in business indefinitely in that manner focusing on just the business itself. However, there is a doctrine in the law in Ohio known as "piercing the corporate veil." What that means is that someone who sues the business can also go after the assets of the business owner personally by "piercing" the corporate shell to go after them. This is why you need a local business attorney near you that you can trust to protect you from potential personal liability.
A business attorney knows that when you start a business, not only do you have to register the company name with the Secretary of State, but you have to create and maintain a set of "corporate books" in order to comply with Ohio's corporate formalities requirements in order to protect yourself from personal liability.
When you are personally liabile for your business' mistakes or your business' lawsuits, then your home (if you own it) and your personal bank accounts are at risk. However, it's not too late to fix it until it's too late. That is, if you haven't created your corporate books and you haven't run into trouble yet, then now is the perfect time to meet with a business attorney near you to correct the situaiton and make sure that you're protected from that point forward.
Evan T. Engler is an attorney and partner at Harris & Engler who helps businesses all over Ohio with a range of their corporate needs. If you want to ask an attorney some business questions, please feel free to give Evan a call at (614) 610-9988.
Minority Shareholder Oppression - Minority Shareholder Rights in OhioA minority shareholder is an individual (or a company) that has less than a 50% stake in a company. Minority stake shareholders can be oppressed and have their legal rights violated in a number of different ways.
In a small corporation or LLC in Ohio (sometimes called a "close corporation"), the majority stake shareholders can oppress minority shareholders by, for example, refusing to declare dividends or distributions, grant exorbitant salaries and bonuses to majority owners, pay high rent for property leased from the majority shareholders, or terminating employment for minority shareholders.
Ohio law provides a number of different protections for minority shareholders and a few different remedies for what can be done in case of minority shareholder oppression. Minority shareholders in a close corporation or other company with a small number of owners are afforded protections under Ohio law because unlike an owner of a large publicly traded company, a minority shareholder for a close corporation has no ready market to sell their shares. Without the additional protections that Ohio law provides, then if a minority stake shareholder was getting oppressed by the majority, they would basically be stuck with their shares unable to do anything about it because of the lack of voting power to make any changes.
Fiduciary Duty to Minority ShareholdersBecause of the possibility that minority shareholders can be taken advantage of by majority shareholders, Ohio law imposes a fiduciary duty between majority and minority shareholders in a close corporation. The fiduciary duty owed to minority stake shareholders in a close corporation essentially means that the majority owners cannot take advantage of and must look after the minority shareholder's interests in the company. When the majority or controlling shareholders breach their fiduciary duty to minority shareholders by using their majority control of the corporation to their own advantage (and to the exclusion of the minority stake owners), without providing the minority shareholders with an equal opportunity to benefit, without any legitimate business purpose, then the minority shareholders can file a lawsuit for breach of fiduciary duty. (Crosby v. Beam, 47 Ohio St.3d 105, 548 N.E.2d 217 (Ohio 1989)). A majority shareholder breaches a fiduciary duty when that shareholder manipulates his or her control over the close corporation in order to unfairly acquire personal benefits owing to or not otherwise available to minority shareholder of the company. See Crosby v. Beam.
One common abuse of power involves the payment of excessive compensation to majority shareholders or corporate officers. Bell v. Bell, 6th Cir. No. 96-3655, 1997 WL 764483 (Dec. 3, 1997). "Given the extensive opportunities for abuse under a close corporation structure, ensuring that majority shareholders of close corporations advance the corporation's and not their personal, interests is critical." Id. Accordingly, majority shareholders of close coprorations owe minority shareholders a heightened fiduciary duty of good-faith and loyalty. If a minority shareholder is getting oppressed by the majority ownership of a company, then they can seek relief in court.
A court will grant appropriate relief where the majority or dominant group of shareholders act in their own interest so as to oppress the minority or commit fraud upon their rights. See Crosby v. Beam. "When a controlling shareholder exercises that control to derive a personal benefit not available to those shareholders out of power, the controlling shareholder has breached his heightened fiduciary duty." First Nat'l Bank of Omaha v. Ibeam Solutions, LLC, 2016 Ohio 1182 (Ohio App. 2016).
When a minority shareholder of a close corporation brings suit against controlling shareholder for breach of his or her fiduciary duties, a presumptoin arises that the fidcuiary, by virtue of his or her superior position, bears the burden of proof with respect to the fairness of his or her actions. Consistent with this presumption, the fiduciary must demonstrate that his or her actions were fair, reasonable, and based on a full disclosure of relevant information.