If you become disabled or retire, a written agreement can define precisely how your disability or retirement will be determined, who will assume your responsibilities, and how you will be compensated for the value of your interest. It can also provide how, upon your death, your family will be compensated for your share of the business, how the value of your interest will be determined, and how your buyout will be funded. Without a written agreement, a conflict about any of these issues could result in expensive and protracted litigation that could have been avoided.
You will need to decide where your business will be located. If you do not own property from which to operate your business, you may need to rent. Unless a thorough, detailed, written lease is signed with your landlord that clearly defines the terms and conditions of your tenancy, your lease will be considered “month to month.” Under a month to month lease, you have no guaranteed, minimum term of occupancy. You could unexpectedly be required to vacate the leased premises with little time to find a new location.
If you own property that you want to rent, a written lease will define the terms of your tenant’s occupancy. It will also define what your rights will be in the event your tenant does not pay rent as agreed or otherwise fails to honor the terms of the lease.
You may have worked hard for many years to build up the value of your business. When it is time for you to retire, you could sell it and use proceeds to fund your retirement or leave a legacy for your family. Or you may want to purchase a business. The purchase and sale of a business involve many issues such as how the sales price will determined and paid, whether the purchase price will be paid at settlement or over time, whether the transaction will be an asset sale or business entity sale, and what are the parties’ respective rights in the event the other party defaults. If you want to buy or sell a business, it will be critical to obtain competent legal and tax advice regarding all of these issues. The terms of sale of a business can have significant legal and tax ramifications.
We can provide legal advice to business clients about all of these issues. We have counseled may clients regarding the purchase and sale of businesses including but not limited to: commercial leases, buy-sell agreements, partnership agreements and stockholder agreements.
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