What type of business transactions or activities benefit the most from legal assistance?
There are no hard and fast rules for when a business owner should engage an attorney to assist with a business transaction. Each situation is unique. Although there are general principals, every rule has an exception.
Generally, opportunities to enter into new transactions can benefit from legal help as much as legal threats can. Improperly structured or documented transactions can lead to disputes which could have been avoided.
Generally, the larger the amount of money at stake, the higher the risk, which makes getting the legal aspects correct more important. However, some relatively small transactions could involve a great deal of risk. Similarly, a large transaction between honorable parties with pure motives and full information, could be relatively straightforward and uneventful.
Generally, the earlier the involvement by the attorney, the less time, difficulty and expense down the road. For example, although often presented as non-binding, a letter of intent or term sheet can have a significant impact on the negotiation of the definitive agreement. The presence or absence of certain binding provisions can also lead to significant problems if the negotiations break down. Some transactions, however, risk being bogged down by an attorney’s early involvement, and others are too speculative to justify an attorney’s involvement until a closing becomes more likely.
Whether or not to use a business attorney is, of course, a business decision. Like any business decision, it should be made upon the careful consideration of the risks and rewards involved, including a consideration that there may be risks that are not immediately apparent.
Below are examples of some of the legal considerations involved in common business activities:
Buying or selling a business
Whether to use a Broker and negotiating the Broker Agreement
Using/Negotiating Confidentiality Agreements with prospects
Using/Negotiating Appraisals & Valuation Experts
Preparing a Selling Prospectus or evaluating a Selling Prospectus
Term Sheets and Letters of Intent
Agreements of Sale
and Meeting Contingencies
Due Diligence
Escrows, Security Agreements, and Indemnification
Employment Agreements
Non-Compete Agreements
Assignment of Contracts and Leases
Tax Considerations
Closing the Transaction
Buying or selling real estate or other major asset
Whether to use a Broker and negotiating the Broker Agreement
Appraisals and Valuation
Term Sheets and Letters of Intent
Agreements of Sale
Defining and Meeting Contingencies
Due Diligence
Escrows and Indemnification
Clearing Title Objections
Real Estate Finance
Assignment of Contracts and Leases
Tax Considerations
Environmental Considerations
Closing the Transaction
Negotiating leases of real estate or other major asset
Whether to use a Broker and negotiating the Broker Agreement
Analyzing the Fixed and Variable Costs
Duration of Lease and Options
Term Sheets and Letters of Intent
Lease Agreements
Defining and Meeting Contingencies
Due Diligence
Allocating Duties and Risks
Insurance and Indemnification
Defining Breaches and Remedies
Negotiating Early Termination Rights
Rights of First Refusal, First Offer, or other Purchase Rights
Identifying and Correcting Title Issues
Environmental Considerations
Exclusives and Restrictions
Closing the Transaction
Establishing standardized forms for regular use in the business
Identifying the Parties
Establishing Contracting Authority
Compliance with Regulatory Requirements
Allocating Duties and Risks
Insurance and Indemnification
Payment Policies and Practices
Defining Breaches and Remedies
Warranties
Entering into other major contracts
Using/Negotiating Confidentiality Agreements
Pricing and Valuation Issues
Term Sheets and Letters of Intent
Defining and Meeting Contingencies
Due Diligence
Allocating Duties and Risks
Insurance and Indemnification
Defining Breaches and Remedies
Negotiating Early Termination Rights
Closing the Transaction
Establishing forms for hiring and firing, including an employee handbook
Compliance with Regulatory Requirements
Defining Standard Duties and Benefits
Defining Breaches and Remedies
Non-Compete, Non-Solicit & Confidentiality Agreements
Avoiding Discrimination Claims
Negotiating Severance and General Releases
Responding to the threat of a lawsuit
Analyzing the Threat
Analyzing the Potential Liability
Analyzing Defenses and Counterclaims
Analyzing Compliance Options
Consider Filing Suit First
Other Litigation Considerations
Asset or Business Protection Planning
Exploring and Negotiating a Settlement
Threatening a lawsuit
Analyzing the Potential Effect of the Threat
Analyzing the Potential Recovery
Anticipating Defenses and Counterclaims
Other Litigation Considerations
Analyzing Leverage Held by Either Side
Minimizing Negative Consequences
Exploring and Negotiating a Settlement in Lieu of Litigation
Responding to inquiries and notices from government agencies
Analyze the Claim and Risks
Obtaining Extensions for Responses or Actions
Narrowing or Clarifying the Scope of the Matter
Compliance with the Request
Organization and Phrasing of the Response
Responding to Requests for Further Information
Exploring and Negotiating a Settlement
Forming new entities
Corporations v. LLCs
“S” Corporations or “C” Corporations
State of Formation Considerations
Bylaws / Operating Agreements
Owner Agreements, including Buy/Sell Provisions
Equity & Debt Structures
Management Structures
Taking on investments from investors
Securities Law Compliance (State & Federal)
Investor Protections
Company or Founder Protections
Debt/Equity Provisions, including Preferred Equity
Super-majority Voting Provisions
Board Representation Rights
Tag-along / Drag-along Provisions
Dilution Protections
Holding the annual owners meeting where there are multiple owners
Choosing & Preparing Agendas
Date, Time, Place Planning
Notice and Quorum Concerns
Proxies / Voting Procedures
Election of Directors or Managers
Board Structures
Management Equity Incentives
Documentation Formalities
Succession planning for the business
Buy/Sell Agreements
Life Insurance Policy Integration
Tax Planning for Redemptions v. Sales
Retirement Benefit Planning - Medical & Financial