Standard Agreements can Protect Your Business and Your Valuable Employees

When we look around our businesses most of us can quickly identify a handful of employees we consider superstars. As a planning exercise identify your superstars and ask yourself the following questions: 1. If any of them left could someone else do their job? 2. If one of them left could you survive the loss of income associated with the departure? 3. If one of them left and started to compete with you or solicit your customers or employees would it hurt your business?

There are many relatively easy and cost effective ways to address these risks including life insurance and employment agreements with standard post employment restrictions on competition, solicitation of customers, raiding of employees and use or disclosure of intellectual property including customer lists. Our attorneys have a great deal of experience with these matters and are happy to respond to related inquiries.

If you have any questions about this topic, please contact Mark Jensen at jensen@bowie-jensen.com or Nicole Windsor at windsor@bowie-jensen.com.

Protection for Each Owner of a Business

If you are thinking of going into business with someone else, be sure to do it with a plan for what will happen to the interest of a business partner who leaves for whatever reason. For a corporation, this agreement takes the form of a stockholders agreement, and for other entities, an operating or partnership agreement. Without the so-called “buy-sell” provisions of such an agreement in place, the remaining owners may find themselves unexpectedly in business with someone who bought the interest from the departing owner, creditors who took over the interest in the personal bankruptcy of the departing owner, the personal representative or heirs of that person’s estate or some other successor to the interest whom they did not intend to have as a business partner.

Typically, buy-sell agreements provide for the company or the remaining owners to purchase an interest upon an owner’s death, disability, personal bankruptcy or termination of employment with the business. These provisions can also set forth the means of establishing the purchase price for a departing owner’s interest and the terms of payment, usually over time to avoid overburdening the company cash flow.

Buy-sell provisions are essential for reducing the chances of costly, time-consuming disputes and providing for orderly disposition of a departing owner’s interest.

If you have any questions about this topic, please contact Jay Merwin at merwin@bowie-jensen.com.

Keep Your Resident Agent and Principal Office Current

Be sure to keep your company’s principal office and resident agent addresses up to date with the State Department of Assessments and Taxation. Keeping these addresses current will help ensure that you receive important information from the state, like the forms for annual personal property returns, and prompt notice if your company is the subject of a lawsuit. You can update your principal office and resident agent addresses with this form. The basic filing fee is $25, and, if you choose to have the filing processed on an expedited basis, there is an additional $50 fee (regular processing time is approximately 7-8 weeks; expedited processing time is approximately 7 business days).