Consider converting your sole proprietorship (individually owned business) to a corporation, limited liability company, or limited partnership to protect your other assets from creditors of your business or from liability claims. It’s a small expense that results in a large benefit
There’s no such thing as a “form lease”. In every transaction, the lease has to be modified to reflect the business terms. Even a $2000/month rent means $24,000 per year, or $120,000 over a five year term. Leases are major financial commitments – for both the landlord and the tenant. Although there are many standard terms which will be included in every lease, you need to make sure that your lease protects your interests. Never sign any lease without knowledgeable attorney review. Try to get your attorney involved at the letter of intent stage, so there is still an opportunity to provide assistance with negotiating the business terms.
Make sure that you have structured your ownership of business assets and operation of your business to maximize tax advantages. Your attorney and your accountant can work together to assist you in making sure you take advantage of all opportunities to minimize taxes.
Your company’s form contracts are an opportunity to protect your company. Whether you use a purchase order form, an agreement of sale, a construction bid form, consulting agreement, or other document, make sure the form you start with includes terms that protect you. Examples of standard clauses that your own forms should contain include limitations of liability, insurance requirements, default interest or late charges for non-payment by the customer, and limited warranty or guaranty language. By the same token, if someone presents a contract to you for signature, ask your attorney to review it. NEVER sign any agreement just because it looks like a “form” agreement. Remember that form agreements are just agreements that someone else drafted to protect their own interests – and not necessarily yours. It is true that sometimes a contract presented to you is a “take it or leave it” proposition – and sometimes the terms are so onerous that you may be advised to “leave it” and look elsewhere.
If you need financing, or are considering refinancing existing loans, we can help you compare different alternatives. Once you select the lender, we can help you negotiate and meet your lender’s requirements, and review the proposed loan commitment and loan documents so that the documents reflect the agreed business terms and try to build in protections (like notice of default, grace periods, and the right to cure defaults).
Many businesses reach a point when the next generation is ready to take over, or it’s time for an owner to leave. When this happens, an attorney can assist you in structuring the terms of the buy-out, drafting the documentation to accomplish your goals, and negotiating financing terms if needed. Your attorney and your accountant together can help you get through this difficult time.
Bonnie G. Ostrofsky is an attorney licensed by the Commonwealth of Pennsylvania. If your project involves another state, an attorney licensed in that other state will need to assist in your matter to ensure compliance with the local laws, regulations and requirements of that state. This website does not create any attorney client privilege or attorney client representation. If you would like legal assistance from the Law Office of Bonnie G. Ostrofsky, P.C., please contact us to discuss whether we can be of any assistance, and the terms of any such representation.
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