Time for Your Company Document Legal Review

When was the last time you looked at, let alone reviewed, your company documents like your Articles of Incorporation, Bylaws, Operating Agreement, or Partnership Agreement. Of course, depending on your situation and how long you have been around, you should also have a few Resolutions, Minutes of your Board and Shareholder meetings, perhaps a Buy-Sell agreement, a Shareholder Agreement, Stock Certificates, and so on.

Types of Businesses

There are three types of businesses generally. First, there are businesses that were formed with […]

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Growth By Acquisition – Strengthening Advisor Relationships

Perhaps the most important thing owners and advisors can do is to specifically discuss their different incentives and interests, how they align and how they might diverge. While this may be a difficult or uncomfortable conversation, the fact the owner and advisors are having such a discussion is a very good sign that the owner is going to get the kind of advice and help they actually need from people they can honestly trust. On the other hand, resistance to […]

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Growth By Acquisition – Advisors

Business owners need the objective counsel of outside advisors to help them identify and consider these issues to make good judgments. However, owners also need to recognize the pressures and incentives their outside advisors are facing, and which might influence their counsel. For example, outside advisors are often likely to obtain work from the owner if the transaction moves forward, creating an inherent pressure to be optimistic.

While it may be possible to arrange multiple advisor relationships in ways […]

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Growth by Acquisition – Risks and Benefits

One way a business can grow is to acquire existing business assets. Those business assets might be client lists, existing contracted accounts, intellectual property, trademarks, real estate, income producing assets, capital investments, infrastructure, and so on.

Acquisitions raise a lot of potential risks and benefits. Often there are questions related to the proper valuation of the assets in question, how a purchase will be financed, how the assets will be integrated into the existing business, how roles and authority will […]

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A Third Way Written Contracts Keep Business Growth on Track

A third way written contracts keep business growth on track is helping to screen customers and partners. Sometimes proposed that having no contract is actually a sign of trust and a good relationship. This may be true in some situations, but not frequently. In fact, a customer or business who shies away from making written commitments to do what they otherwise say they will do is probably someone to avoid because there is a disconnect somewhere. If the trust is […]

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A Second Way Written Contracts Keep Business Growth on Track

A second way a written contract can keep business growth on track is by creating certainty, stability, and predictability. Business growth runs on efficiency. Profit margins exist because the costs of operation are less than the revenue being generated. It is often hard enough for businesses to create profit margins when things are running smoothly. Errors, uncertainty, instability, and confusion in relationships with customers cost a business time and money and will reduce its margins. Written contracts minimize the risk […]

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Some Ways Written Contracts Keep Business Growth on Track: First Way

One of the things a business owner can do to help their business grow is to put their sales agreements, service agreements, and all other relationship in which they expect to receive revenue into written contracts.

First, and most importantly, this actually sets the stage to get paid. Too often, businesses fail to get paid merely because they failed to have a written agreement spelling out how, when, and what they would get paid. It is often true that the […]

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Solicitation Rule Changes – Part II

The most difficult type of accredited investor to verify is the natural person who meets the income or asset requirements. As discussed in a prior post, an accredited investor includes a person who has a net worth that exceeds $1,000,000.00 (without taking into account the value of a primary residence), or an individual who made $200,000.00 in the prior two years, or joint income with a spouse exceeding $300,000.00 in the prior two year, with a reasonably expectation of making […]

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Solicitation Rule Changes – Part I

As noted in a prior post, general solicitation of investors for private investment has historically been prohibited under SEC rules. This has meant that a party seeking investment could not solicit the public to find investors through such means as websites, radio or television ads, articles in trade publications or magazines, and so on. Accordingly, parties seeking investment have always had to maintain a careful watch over how they look for, and find, investors.

In 2012, Congress passed, and the President […]

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Resale Limitations for Securities from Private Placements

Another limitation under the SEC rules for a private placement which will be under the safe harbor provisions is that the issuer must take reasonable care to make sure the securities are not resold without registration or the application of an exemption. Specifically, this means the securities should not be issued to an underwriter, that is, someone who buys the securities to sell them again. Generally, this can be accomplished with a reasonable inquiry, a disclosure of the restriction on […]

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