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Are you ready to dissolve your partnership?
Over the years, your company has grown and had its ups and downs. When your business first started out, you entered into a partnership because you and your partner felt that path was right for the goals and ambitions of the business. However, you may have come to the point, as many partners do, where you feel that the business relationship no longer works.
After much discussion, you and your partner may choose to dissolve the partnership. Of course, this type of relationship is not one from which you can simply walk away. Indeed, you must take the proper legal steps to ensure that the dissolution takes place in a manner that protects the soon-to-be former partners and the company.
One stays, one goes
The actions taken to dissolve partnership may depend on who wants to end the business relationship. If you want to continue with the company while your partner does not, you may need to buy out the other individual's shares in the company. On the other hand, if you want to leave the partnership, the other party may need to buy your shares. Having a buy-sell agreement in place can help ensure that everyone stays on the same page.
Should you change your company's business type?
When you first started your business, you undoubtedly gave much thought to the type of business entity you wanted to create. Because you were starting out small, you likely did not believe that you needed a business type that involved many complex aspects. After doing your research, you picked an entity that you believed best suited the needs of your company at the time.
Of course, now that your business has been up and running for some time, you may wonder whether your entity still suits those business needs. However, you may also wonder whether changing your business type is possible or necessary. To answer the first question, it is entirely possible to alter your type of entity. As for necessity, many reasons could lead to such a change.
Reasons to change
Depending on what is happening with your company — whether in terms of profit or growth — you may need to change your business entity for one or more of several reasons. Some of those reasons include:
5 questions to ask when creating a noncompete agreement
For various reasons, you may have decided that your company should utilize noncompete agreements when working to prevent your trade secrets or other important information from falling into the hands of your competitors. These agreements certainly have their uses, and if you believe that having such a contract could work toward protecting your company's best interests, it may prove wise to gain more information on these agreements.
In particular, you may want to focus on the enforceability of any contracts you create. Many business owners feel surprised to find out that their noncompete agreements do not meet enforceability requirements. As a result, they may not provide as much protection as hoped.
How to ensure enforceability
Fortunately, you can take steps to ensure that your noncompete agreement does not present issues that could later render it invalid. Some questions you may want to ask when drafting your contract include the following:
Are you ready to pass on the reins of your company?
Because you hold both your family and your business close, you certainly want to ensure that you take care of them. As a result, when you begin thinking about your retirement or possible demise, you will want to know that your family and company remain in good hands. Fortunately, business succession planning could prove useful in this respect.
When thinking about who you want to take over your business and how you want the company to continue to operate, you will likely have many aspects to consider. Wanting to keep the business within the family is understandable, especially if your children already work as part of the company. However, you still need to make sure your successor is the right fit for the job.
Willingness
In order for a succession plan to prove successful, a willingness to move onward and upwards needs to exist between both you and your successor candidate. If your candidate does not know whether remaining in the family business is what he or she wants to do long-term, it may be wise to consider another person rather than trying to force the company on an unwilling relative.
Lease terms can have a significant impact on your business
As a small business owner, you know how important it is to have appropriate space to run your business operations. Commercial real estate can be difficult to come by for small businesses in Texas, yet there are many things to consider when negotiating a lease. Lease agreements are serious, and the terms can have a significant impact on your operations and financial health.
If you think you found the perfect location for your company, it can be tempting to forge ahead and sign on the dotted line as quickly as possible. However, there are significant benefits to seeking guidance as you make important decisions, even allowing a legal ally to negotiate the commercial lease on your behalf.
Important considerations when leasing
Leasing space is an important step for your business. While this is an exciting time, it is beneficial to protect your future interests by negotiating terms that are fair and reasonable. Many businesses suffer the consequences of poorly worded or unfair lease agreements because they did not proceed carefully in the initial stages of contract negotiation. Some things you would be wise to consider include the following:
Collecting debt the right way is good for business
As a small business owner, collecting money people owe you is a part of doing business. In many cases, people will simply pay what they owe without issue, but there are times you will have to deal with difficult customers who refuse to pay for services rendered or products received.
In cases in which there is a dispute over owed balances and collections, you may find it beneficial to seek a full understanding of how you can protect your rights as a business owner. You have the right to take appropriate measures to secure the money owed to you, but it is prudent to know what you can and cannot do as you undertake this effort. Many Texas business owners find it beneficial to seek legal guidance as they pursue a beneficial solution for collections disputes.
Why won't people pay?
There are several reasons why a person may not want to pay you, even if he or she clearly owes you money. Some of these reasons include the following:
Have you considered creating a partnership agreement?
Starting a business in Texas can be an exciting endeavor. Perhaps you have had your idea for as long as you can remember, and now that the time has come to bring your business dreams into reality, you likely cannot wait to get started. Additionally, your future business partner or partners may also share in your enthusiasm and feel ready to get the ball rolling on your future success.
Though you and your partners may have known each other for years — or perhaps even since childhood — you may not want to move forward with creating a business partnership simply on the basis of friendship. Some form of legal understanding needs to exist in order for each person to know what to expect from the partnership as well as to keep each party accountable. Therefore, you may wish to consider creating a partnership agreement.
Legal contract
A partnership agreement acts as a legal contract, which means that any partner who breaches its terms can be held liable. You may think that you do not need this type of contract because you trust your partners and feel confident in their abilities and attitudes. However, personalities, relationships and numerous other factors can change over time. Therefore, it may prove wise to safeguard your company through legal means rather than risk having a friendship falling out resulting in business damages.
Mechanic's lien can be complex but effective
In your business, you can't take for granted timely payment. When you have employees, suppliers and you own bills to pay, waiting for a contractor or property owner to compensate you for the work you have finished can be frustrating and damaging to your business. You may know that you have the right to file a mechanic's lien if a customer doesn't pay within a certain amount of time. However, the process may seem complicated and time-consuming.
That's because it is. Nevertheless, a mechanic's lien may be your best advantage to getting payment that you deserve for the work you have done. While you may be able to access online services to attempt to file a lien, the complex nature of the process means you are taking risks with your company that you may not be able to afford.
Providing preliminary notice
If you are a contractor or subcontractor who has not received payment for work you did on a construction project, you have every right to pursue payment through any legal means. A mechanic's lien is an assurance of that payment. However, the lien must be filed properly, meet all deadlines and coincide with the laws of the region in which the project exists. Since each state has its own laws, seeking professional assistance is always a wise decision.
Could your business benefit from a non-compete agreement?
Having a valued team can help any business successfully go through its daily operations and work to meet future goals. Of course, as the business owner, you want to ensure that any team members you have will protect important company information and not damage business operations should they choose to leave the company. Though this task may seem difficult, you may have the ability to create safeguards.
In particular, you may want to ensure that any business competitors cannot obtain business information from your company should a former employee of yours choose to work for a similar company. As a result, you may choose to create a non-compete agreement in hopes of protecting your company's best interests.
What is a non-compete agreement?
A non-compete agreement is a type of contract that dictates that, when an employee leaves the company, he or she cannot obtain employment by a competitor. Of course, these types of agreements need to have specific details, as you cannot simply bar an individual from gaining employment in certain areas or from certain companies forever. Therefore, your agreement must meet legal standards, including:
Make no dispute: Contract disagreements can hurt your bottom line
As a Texas business owner, you likely use contracts as an integral part of your overall business structure and regular transactions. From the signed agreements you may have with your employees to deals you set in writing with other companies, signing your name on the dotted line is probably quite familiar to you. Hopefully, you know enough about contracts to understand their importance in relation to your bottom line interests. Put another way, contracts gone bad can do a lot of damage to your business.
Therefore, like most savvy business owners, you do your best to make sure you clearly understand all terminology, obligations and responsibilities contained within a proposed agreement before you add your signature. Even then, problems may arise down the line that bring the validity of a certain deal into question. This is where a notary public can be a great asset.
A notarized contract is a solid contract
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