Frequently Asked Questions
Frequently Asked Questions
Miami Business Attorney Brett Trembly addresses commonly asked business law questions. If you have any questions for Brett, or if you need immediate legal assistance, please contact us today.
I think that a competitor has stolen my intellectual property. What can I do?
If you think someone has stolen your intellectual property, which could be a logo, or some sort of other trademarks, insignia or a copyright, you need to act quickly. There is an aspect of law called acquiescence, that if you know and you’re on notice that somebody is using something that you have copyrighted or trademarked and you let it go on for long enough, potentially, you could lose your trademark or copyright. So one, you need to move quickly to need to contact an attorney or an intellectual property firm that specializes in IP work, because it’s a highly technical area of law. In fact, it’s not something that my firm handles but I work with a few really good IP attorneys that I recommend, and I work closely with when these situations arise.
My partner wants to sell our business but I don’t want to. What are my options?
This is a tough answer, because it depends on what you have in writing. What I mean is, what agreement Do you have between you and your partner? Did you take the time to do a partnership agreement? Or an operating agreement when you started the company? Or did you guys just start? You know what, let’s open a business. We’ll figure out later. And then you never took the time to put in writing who has what rights and obligations so in some circumstances, you have the right to buy out your partner, but in other circumstances, your partner has a right to force dissolution of the company. So that is a question that really, I would need to see what documents you have in place to give a full answer.
What are the most important legal issues that every business should address?
Most important legal issues, that’s kind of all a hard list to come up with and rank definitively. First, second, third, but there are three that I can think of which if you don’t take care of these can really just screw up your business and your life potentially. So you’re gonna want to make sure these three things, and there are many others. But one is in your contracts, you want what’s called a venue, or forum selection clause. So if you’re providing services, and it could be over the internet, you could be shipping goods, or you could have clients coming from all over the country. And even if your business is located, for example, in South Florida where I am, then you want to make sure if something happens that if they want to sue you, they have to do it in your home, venue, or city because imagine, you get dropped with a lawsuit in the state of Washington, well, that’s an automatic loser for you, you’re it’s just gonna not make sense for you to go across the country and defend a lawsuit. The next one would be personal liability, make sure that individually, you’re kind of separated and protected from the debts of the company. And the third thing is you want to make sure that you’re not violating any copyright of another company. So for example, if you’re using a logo, or you came up with a motto or slogan, you want to do some research research ahead of time and make sure that you haven’t actually unintentionally stolen or use someone else’s intellectual property. Those are the three things that could really put a hurting on your business quickly.
I’m thinking about buying an existing business. What legal questions should I consider?
I have a laundry list of questions that we would need to go over with the seller of the business before I would ever advise you to move forward with purchasing a business. You have to look at financials from three to five years in the past. You have to make sure that the proper insurances are in place. You’ve got to look at the debts compared to the liabilities and the profits. There are so many things to look at when buying a business. And also an analysis of cashflow for the past three years has it flatlined. Is it continuing to grow? What is the market bear in the area depending on the type of business? There is a lot to consider before you make such a huge investment like purchasing a business.
Is there anything I can do to reduce the chances of my business being sued?
There are steps you can take to reduce the likelihood of being sued. Of course, anyone can sue anyone else at any time. You know, you’ve heard of all the silly lawsuits out there. It’s unfortunate, but what you want to do is give yourself the most amount of leverage possible so that you reduce the likelihood that you will get sued. And the way that you can do that is by having very strong contracts with some clauses in your contracts that that state that if you are sued, that the prevailing party is going to get attorney fees, that is a huge detriment to bringing a lawsuit, which is if I lose, I’m going to you know, also have to pay for this person’s attorneys fees. So you want to have good agreements in place between you and your other business owners and really good contracts in place. Whether it’s a service agreement, or you’re distributing a product, you’re gonna want to protect yourself as much as possible to reduce the likelihood you get sued, and also put yourself in the best position that you possibly can if in fact, you are hit with a lawsuit
A former client is refusing to pay me. Can I file a lawsuit to force payment?
You can file a lawsuit against someone that owes you money. Now, depending on the amount of money that is owed to you, it might not make sense to run to the courthouse and file a lawsuit. I recommend to my clients to reach out first and see if we can come up with an agreement where we can settle out of court instead of incurring legal fees upon legal fees and running through a lawsuit which can take two to three years cause a lot of stress, it’s usually a better option to try to settle the matter first. And if that’s not successful, then depending on what’s in the contract and how strong your position is, then yes, of course you can file a lawsuit against someone that owes you money.
I am planning to sell my business. What legal issues should I consider?
There are a lot of issues to consider when you want to look into selling your business. A lot of them will have to do with what the market is sort of bearing for comparable businesses like yours that have sold recently, which you can do some of that research online. There are other experts that can help do evaluation on your business depending on a lot of different factors in the industry you’re in. And of course, you’re going to want to know tax wise what the penalty is going to be against you individually when you sell your business as well as who assumes your liabilities, your current contracts. There are a lot of things to consider before you move forward with trying to find a buyer for your business.
Why being an incorporator on sunbiz doesn’t give you ownership rights
Just because you’re listed on a document as an incorporator, or on Sunbiz and Florida as an incorporator, that doesn’t give you any ownership rights, you can be listed as president, vice president, secretary treasurer, those are officer positions in a company. It doesn’t mean that you’re a shareholder, you have to be very careful, because I’ve seen people get tricked into believing they had ownership, but the shareholders agreement indicated otherwise. So again, do not rely on the information on sunbiz. Make sure you have your corporate documents in place which verify your ownership percentage in your company.
How to get screwed with licensing language
You have to be very careful about what’s in a contract and what the contract is titled. For example, I had a client that came to see me one time because he had been what he thought buying a business for about 10 years. But it turns out the language kind of read as it was a licensing agreement, meaning at the end of the term, my client lost the business and it reverted back to the owner. I’ve seen some tricky business owners out there, use this maneuver. So always make sure you tell your attorney to carefully review a contract before you sign it and make sure that if you’re going to spend years and years purchasing a business, you’re actually going to own the business when it’s said and done.
My partner never works, so I want his part of the business!
I get this question a lot one business owners frustrated with another business owner for not working hard enough or sometimes not working at all? Well, the bad news is unless you have something in writing, specifically stating that the business owners have to contribute a certain amount of time or capital to the business, that business owner gets to retain their percentage ownership, regardless of how unhappy you are. So at that point, you’re going to have to look at your buyout options or somehow change the corporation around which may be very difficult if you’re 50 50%. Owner. So again, this is why you want to make sure you put your legal documents in place before you start the business.
How to use an ownership vesting schedule to align interests
Business owners often will ask me how they can give five or 10% of their company to a very loyal employee. And the problem is once you sign the paperwork, if you give away 10%, or any percentage of your company, that employee doesn’t have to work anymore, they can disappear and keep their 10% of the company and cash in months or years later. So a smarter way to do that is to have a vesting schedule where the employee may get one or 2% Every year over a period of time to ensure that they have to continue working in order to truly be vested in that percentage ownership. It’s a very smart way to do it. If you don’t want to lose a percentage of your company and get nothing in return.
Is a verbal agreement legally binding?
A verbal agreement is in fact legally binding if the parties came to an actual agreement, which can later be proven by overt acts taken on behalf of those parties, in reliance upon the agreement, and I know that some legalese, but really if you and I have a handshake deal, and you go out and you incur debt or take some sort of action based upon our agreement, then that is a legally binding oral agreement.