Why Your Chattanooga Business Should Have A Lawyer

So you’ve saved up some money, developed your own market strategy  and created a business plan. Congratulations on your primary steps in the direction of entrepreneurship! It might have been your childhood dream, or a spontaneous decision, but now you’re finally ready to get the ball rolling. But wait!

Have you contacted a Chattanooga Business Lawyer?

It’s usual to think people only require a lawyer when something is going wrong. This is a common misunderstanding! You don’t have to wait for a catastrophe to strike to hire a lawyer. This will benefit you both in the beginning stages and also before finding yourself in an urgent state. Below is a list of reasons why every business needs a lawyer.

1. Business Entity Formation

Your business structure will determine what liabilities you deal with, just how your entity is taxed, as well as how your profits are split. Right here is a brief checklist of the various types of business structures:

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

To learn more about this aspect, contact Mckoon, Williams, Atchley & Stulce for a free legal consultation.

2. Trademark and Intellectual Property

You can have a wonderful product or service, but get lost it comes to picking the name. Did you know that Starbucks was nearly called “Pequod’s”? Or that Pepsi was first released as “Brad’s Drink”? However, a dull or ordinary name may just be the least of your concerns if you receive a cease and desist notice for unconsciously using somebody’s trademark.

Consulting with a lawyer first, can help you avoid this issue altogether.

At Mckoon, Williams, Atchley & Stulce, we understand that this is our work to research trademarks to make sure that you prevent infringement and to search any kind of potential issues. When your brand is developed, we will additionally assist in protecting your business’s name. Developing a trademark can be time-consuming. Having a lawyer take care of these matters can let you completely dedicate yourself to getting your new business started.

3. Contracts, Contracts, Contracts

Contracts play essential role in business, regardless of size and profits. This is a legal tool to handle sales, employees, and leases. Here are some examples:

  • Bill of Sale –  Formally specifies a property’s transfer of ownership
  • Warranty – As you may already know, a warranty compensates a customer if s/he receives a product that is defective or breaks down during its expected lifetime.
  • Employment Agreement – Though you may have discussed working conditions with an employee at the interview, this is not enough. You should have a legal document that outlines responsibilities and methods of payment to an employee.
  • Commercial Property Lease Agreement – One of the most crucial contracts you will have to sign. It’s the terms and conditions that you have with a property owner when renting out a space for your business. This concerns offices, stores, restaurants, and etc.

An experienced lawyer at your side can assist you in creating contracts to avoid potential legal issues. Mckoon, Williams, Atchley & Stulce, PLLC will additionally lobby for your benefits in the contracts you make or enter into with the third parties.

4. Exit Strategy

Individuals most likely to have attorneys prepare a will to ensure that when the day comes, any type of disputes including the succession of their properties can be avoided. A Chattanooga business lawyer can help establish an exit strategy for your business as you expand, ensuring it will continue (or dissolve) in whatever manner you choose.

5. Disputes

In an ideal world, business partners stick together, nobody generates terrible ideas, and contracts are always upheld.

Yet, this is not always the case.

If there is anything lawyers are best at, it’s settling disputes. Nevertheless, when these problems do emerge, wouldn’t you want to have a lawyer that knows you personally and understands the aspects of your business?

When things fail, you’ll already have a legal team to lobby for your best interests. Contact McKoon, Williams, Atchley & Stulce – Chattanooga lawyers experienced in  business law matters, large and small. (Please do not include any confidential information in your inquiry.)

Tips On Business Entity Formation

If you want to save money on taxes and protect yourself from liability, you have to think about business entity formation. It could be a limited liability company (also LLC) or a whole corporation which is legally a different “person” from its owners. Below are some useful tips on business entity formation from a firm of professional attorneys McKoon, Williams, Atchley & Stulce. 

Filing Formation Documents

To start the process, you have to submit a form with the state agency that handles business filings (generally the secretary of state) together with a filing fee, which differs from one state to another. In Tennessee, this makes $50 per member (minimum of $300 and maximum of $3,000). Once the state obtains and also processes your formation documents, you’ll receive a certificate verifying that your new company officially exists.

In addition, every business entity should have records that explain the rights and responsibilities of individuals who own and run the business. Although these records are not submitted with the state, they are very important guidelines for operating your company and can help to avoid pricey conflicts later on.

Setting Up Financial as well as Tax Accounts

It’s important to separate your personal expenses from business ones. The best ways to achieve it are:

  • Obtain a federal Employer Identification Number (EIN). A lot of companies need to have an EIN, business equivalent of a Social Security number.
  • Open up a business bank account. Take your business formation certification as well as EIN to a bank or credit union to open a business account. Think about getting a business credit card as well.
  • Register with state and local taxing and licensing firms. You must register with your state taxing authority to pay state taxes, including income and sales tax. If you hire people to work for you and your company, you must  likewise pay various employment-related taxes.

Getting Business Insurance

By forming a business entity, you could safeguard your personal possessions in case of lawsuits against the company. However, it cannot protect business from possible terrible losses caused by personal injury lawsuit, fire, theft, flood or data breach. For that sort of defense, you require business insurance coverage. There are several sorts of business insurance for different kinds of threat.

Making Contracts

Any business needs contracts to cover even their most common deals. Remember, unless your agreement is done in a written form, it’s not valid in terms of law. Our Chattanooga business lawyers know all the pitfalls that may waylay business owners. The basic set of contracts every business owner should have includes:

  1. Nondisclosure agreement (NDA). Shields the business’s confidential information by calling for people to keep details concerning your business private.
  2. Employment contracts. Provides written employment terms.
  3. Intellectual property assignment. Permits the transfer of property legal rights while securing the rights of all parties.
  4. Terms and Conditions. Specifies the rules regulating using a website.

Written agreements are essential because they assist prevent misconceptions as well as make it much easier to enforce a contract in court.

Staying Up-to-Date with State Agencies

Tennessee laws require business entities to keep certain documents. These might include meeting minutes, resolutions and also ownership records. You might also need to file a yearly report and pay an annual charge. The guidelines vary based upon the sort of entity, so consult an experienced business lawyer for more information about your responsibilities.

McKoon, Williams, Atchley & Stanley, PLLC organizes business entities, ranging from sole proprietorships and partnerships to corporations and limited liability companies (LLCs). Our clients include existing businesses and startups, as well as founders of closely held companies, professionals, and investors in real estate. If you are looking for a lawyer, schedule a free consultation. (Please do not include any confidential information in your inquiry.)

Succession Planning for your Business In Chattanooga

Let’s begin at the end: what would happen to your business if you were to pass away? Whether your business is a sole proprietorship, a partnership, a single-member LLC, or a multi-member LLC/multishareholder corporation, planning and preparing for the transition of
your business is critical to help your family, your employees, and/or your co-owners either to continue the business or wrap up the affairs of the business upon your death.

There is no “one size fits” all approach to transition planning due to the wide array of factors to consider, including business size, industry, individual goals, and family dynamics, to name a few. If you are a sole-owner (sole proprietor, single-member LLC or single-shareholder corporation/scorporation), your family or designated agent will not have authority to act on behalf of the business (access accounts, sell assets) unless you have done some preparation. Additionally, if yours is a family business where family members (commonly children) work with you, is there one or two children who may be more capable of running the business? Can the children get along if they are forced to run the business together? More importantly, do any of the children want to take over the business?

If you are part of a multi-owner business, you and your co-owners need to determine what will happen in the event of an owner’s death. For example, if your co-owner dies, do you want to be in business with her spouse or family? If your answer is no, then you should run, and not walk, to get some succession planning in place. The same cautions apply to a transition upon retirement. Waiting until the day before you retire will inevitably end badly. The moral of the story is make succession planning a priority, not an afterthought. And for those among you who are superstitious, take heed – talking about death will not in fact cause death.

Do I Need a Lawyer?

Many businesses have their own In-House General Counsel. This is a
great option for those businesses that have the volume of work and
can handle the substantial financial obligation. For most businesses,
even many larger businesses, this is simply neither necessary nor
practical. At McKoon, Williams, Atchley & Stanley, PLLC we seek to offer those same In-House General Counsel options through our Outside General Counsel services. As your Outside General Counsel, we not only take the time to learn about your business, we seek to gain a meaningful understanding of it.

Attorneys from McKoon, Williams, Atchley & Stanley, PLLC are prepared to respond to questions in a timely and knowledgeable way, whether it be to help you form a new business, review a contract or lease, prepare an employment agreement, pursue collections of accounts receivable, counsel you regarding employee disputes, or helping you think about succession planning.

We encourage you to call or email, no matter how small your matter or
question, just as though you had your own in-house counsel right
down the hall from your office. As part of our Outside General Counsel services, we can also ensure that if family or criminal law issues arise, we can point you to attorneys in our firm, as opposed to having to look for a new firm or attorney you don’t have a relationship with.

McKoon, Williams, Atchley & Stanley, PLLC offers the knowledge, skill, and experience needed to help clients navigate the legal complexities inherent in Chattanooga business law matters, large and small. If you are looking for a lawyer, schedule a consultation. (Please do not include any confidential information in your inquiry.)

Importance Of Buy-Sell Agreements For Your Business

In any organization with several owners, there is a great chance that at some point, one or more of those proprietors may not be affiliated with the company, whether by choice, death, bankruptcy, or divorce. For business owners it is necessary to prepare for this ahead of time, to ensure that when one of these situations occur, there is a pre-existing agreement that sets out a legal way to deal with the circumstances. The best means to do this is with a buy-sell agreement.

A buy-sell agreement is a contract between business owners that determines who has a right to purchase a leaving proprietor’s share of business and establishes a fair price for the owner’s stake. The contract might likewise give procedures to fix disagreements when a bulk of the proprietors yet not all of the proprietors make a decision to offer the business. Here are some reasons that you, as an entrepreneur, don’t want to stay in business with other individuals (even household) without a buy-sell contract in place:

1. Ability to choose partners.

if you do not have a buy-sell arrangement in place, your partner’s stake in the business can be transferred to third-parties for many factors: your companion decides to market, declares bankruptcy and is compelled to sell, passes away, or gets divorced and also his partner winds up with some or every one of his shares. In this occasion, new partners will step in and typically they are the people you don’t want to rely on. This may threaten your business’s ability to continue on its current course.

2. Get bigger stake.

If one of your partner decides to quit, you have a method of getting his stake in the business so that he lose the capacity to influence the business after he is no longer entailed. Buy-sell agreements often require that an owner needs to market his stake back to the company or other partners. Also, given that buy-sell contracts supply a system for figuring out a fair rate in the departing partner’s stake, there’s no chance for an ex-partner to extort an unreasonably high sum on his way out.

3. Decrease your estate tax.

The valuation method proposed in a buy-sell agreement serves not only for purposes of an eventual sale, but likewise for estate tax valuation.  Independently possessed services are hard to value. A proprietor’s concept of a company’s well worth at his death could be much less than the IRS’s. Nevertheless, if you have a buy-sell contract in place, as long as such contract is a bona fide arms length transaction, you could utilize the method consisted of in that agreement as evidence as to just how business should be valued. However if no process for valuing the business has actually been put into location, the IRS will certainly be cost-free to establish its very own value.

4. Protection Of Shareholders

It could secure minority shareholders from being cheated out of the proceeds of a sale of business. For example, after the sale of the business, the minority proprietors will certainly be entitled to the exact same cost each share as the bulk owners. This prevents bulk shareholders from conspiring with a purchaser of the business and also drawing out a control premium from the purchaser to the detriment of the minority shareholders. On the other hand, such agreements prevent minority shareholders from vetoing a sale of the business. If it includes a drag along stipulation, then a bulk of proprietors can force the entire business to be sold. Without this, it is possible that even a 1% proprietor can hold up a whole bargain, possibly to extort the other owners for a greater portion of the sales proceeds.

5. Protect Your Family Members

Among the most likely reasons to leave your own business or transfer your stake is disability or, what is worse, fatality. In such cases you will probably not be capable of working out in behalf of your family. Your relatives family will need and should be paid the fair worth for your hard work and efforts you put  into the development of your company. If there is no buy-sell contract in place, the other owners may be reluctant to pay a reasonable quantity for your risk and also are most likely to at least negotiate against your family members. A buy-sell contract ensures in a pre-agreed way that the work you take into your service deals with the people you appreciate a lot of.

A buy-out between co-owners of a business (including redemption of shares by the business entity) is often routine, but it can be the result of a tense, stressful negotiation. McKoon, Williams, Atchley & Stanley, PLLC is experienced in both these situations, and for those clients who wish to plan ahead, we help avoid the disruption that a hostile buy-out negotiation causes by drafting a buy-sell agreement ahead of time. Contact us if you are looking for a lawyer, schedule a consultation. (Please do not include any confidential information in your inquiry.)