A Buy/Sell Agreement is a written contract almost always between two people who own property or a business together. The agreement contains an offer by one party to buy out the other, at a fixed price or, as an offer of fairness, at the same price. These agreements can be a good, fair way to structure a separation between parties who worked well together once but who can no longer cooperate. But they can also be manipulated, especially when one party has many more assets than the other.
Usually, Buy/Sell Agreements which are prepared after the relationship has soured are a prelude to litigation. If they are not successful, a business brawl ensues. So, when planning your business, you should also plan on how to withdraw from it if things don’t go as well as you hope.
These issues encompass several areas of the law, including disability, discrimination and competition. They revolve around two major business activities: hiring and firing employees. When can you fire someone? What are prohibited reasons for not hiring someone? What terms can you impose on your employees to ensure they will not steal your customers, or secrets, or confidential knowledge, and then go out and compete against you?
There are federal laws on these topics and each state has its own laws. If you comply with these rules, you can protect yourself and your business. If not, whether through ignorance or otherwise, you can run into a great deal of trouble.
Everyone wants to protect what they own or what they think they own. Unfortunately, even if you paid for someone to create something for you, there are many factors that determine whether you own it unconditionally. A work created for or prepared by someone else usually falls under the copyright category of a “work for hire.” But not always. And what about the confidential information or trade secrets you have spent hundreds or thousand of hours and dollars to create? Your employees need to know this stuff in order to work for you but … can they use what they learned against you if they leave? Not always, but it depends.
The law provides various ways to protect your interests, confidential information, trade secrets and technological innovations. But if you don’t know what they are, or if you don’t do exactly what is required, you could lose your rights. And even if you do, you may have to fight to enforce them. So it’s easier to protect yourself by doing it right the first time.
Obtaining money to buy a business, expand it, or even start one is extremely complicated. There are interest rates, different sources for the business, investors or lenders, equity or loans, terms, repayment conditions, guarantees, and other complications.
Sometimes people make promises they cannot keep. Sometimes passive investors suddenly decide to become active and interfere with the business—or they need to step in to protect their investment and aren’t allowed to do so. Or business circumstances change. Or the law itself can change (like the recent change in the bankruptcy laws).
All these things can affect the ability to obtain or repay monies. (And this does not even address the possibility that where there is money, there are predators trying to take advantage of the naive or the innocent.) It’s when these things happen that people can disagree and the disagreements can become heated disputes. That’s when you need a dispute resolution specialist.
Environmental problems involving air, water, and land are only some of the potential areas of concern for business owners and business operations. Consider this personal anecdote. When I was looking to buy a house I found one on a lake, the shore needed filling in a bit due to erosion. I almost bought the place until I remembered that wetlands are regulated by the U.S. EPA, the state and the U.S. Coast Guard. The lesson to be learned? Buying property requires an environmental survey.
If your business uses cleaning supplies, or is on a piece of property where cleaning supplies were used, or near a dry cleaner or gas station, you might have legal issues involving toxic waste. Also, if your business is in a building constructed before 1980, it might have lead paint, asbestos ceiling tiles or asbestos insulation. All of these can make for a toxic or hazardous waste problem. Such problems can be expensive to fix, and you might have to eat the cost, not the person who created the problem. Alternatively, if you sold the property, you could still be involved in fixing the cleanup. The brawls to figure out who should pay for what can be time consuming and very expensive, since the costs of fixing the problem(s) caused by toxic or hazardous waste are so high.