As a business owner, you want to ensure you have trusted and competent legal counsel to help you across the broad range of commercial circumstances which arise in managing your business. Whether you need to draft contracts for vendors or employees, prepare your business for sale, purchase equipment, are considering buying a franchise, or if you have a court matter, we can help. Our solutions are tailored to each client’s specific business structure and are provided in a timely and efficient manner with due regard to your needs and preferences.
Business Formation and Organization
From the initial business entity choice and formation, through operational considerations and ownership agreements, you should plan ahead for success and growth, avoid controversy where possible and anticipate issues that may arise in the future. Setting up your business properly at the onset can ensure that your personal assets are protected, your liability is limited, you have the most efficient and effective tax structure, and you minimalize your losses. Determining which business entity will best meet your immediate and long-term needs is not always clear, and we can ease the confusion of entity selection and formation, advising you on the best choice for your business. We can help you with all entity types, including:
- Sole proprietorships
- Professional Corporations
- Limited Liability Companies (LLCs)
- Limited Liability Limited Partnerships (LLLPs)
- Joint Ventures
- Non-profit entities
Our business formation services include the preparation and filing of articles of organization, partnership certificates, articles of incorporation, amendments, restatements and preparing corporate by-laws and minutes. We can file the State of Hawaii and federal documents, obtain your tax licenses, file annual registrations, and assist with licensing and permitting.
Owner Operating, Shareholder, and Other Business Agreements
One of the most critical elements of going into business with a partner is to have an agreement as to how to operate the business. These documents serve as a legal contract between the business owners and the business itself. It typically spells out terms that detail the management of the business, distribution of profits and losses, and all other internal operations of the company. By having these items spelled out in advance, owner can avoid future disputes and disruption to business operations. By failing to have an agreement, you run the risk of having your business governed by the default state laws.
A shareholder agreement (also known as a stockholder agreement) is a contract between the shareholders of a corporation. The contents in a Shareholder Agreement depends on the corporation and the shareholders, but it usually addresses:
- Shareholder rights and responsibilities.
- Share ownership and valuation.
- Management of finances, business, assets, capital, and shares.
- Rules for issuing new shares and restrictions on share transfers.
- Actions to take upon the death or incapacitation of a shareholder.
- Conflict of interest rules, such as a non-compete clause or non-solicitation clause.
- Dispute resolution methods.
Essentially, it establishes the rules that govern the shareholders’ relationship to the corporation and to one another. A Shareholder Agreement addresses important issues, such as the transfer of shares and the rights of shareholders and officers, to keep the corporation running smoothly. In summary, this internal document can protect shareholders by confirming that everyone is in agreement over the corporation’s rules and can also be used to refer to in the event of future disputes.
We can also assist you with setting up a joint venture (JV) company and the drafting of the JV Agreement between owners, employment agreements, partnership agreements, and most other agreements relating to the operation and governance of business organizations.
Purchasing a Business
A business purchase agreement is a contract used to transfer the ownership of a business from a seller to a buyer. It includes the terms of the sale, what is or is not included in the sale price, and optional clauses and warranties to protect both the seller and the purchaser after the transaction has been completed. You may wish to simply purchase the assets of an existing business, in which case you will need an asset purchase and sale agreement. There are different legal ramifications for both scenarios and we can help you select the best option for you.
When purchasing a business, it is wise to undertake careful due-diligence and then to ensure that your business purchase documentation is in order and appropriate for you in the circumstances. Buyers need to be aware of any weaknesses that the business has, the results of which may affect amount you offer to pay for the business.
We will walk you through the due diligence process, including examining the strength of the customer base, the adequacy of the business premises (including any lease), and your ability to increase the profitability of the business. We can also prepare your loan documents, security and guaranty documents, and assist you with acquisition and business succession strategy.
Selling a Business
The sale of a business, large or small, must be properly documented to ensure that you exit well. We can address the technical issues that will assist in protecting your legal interests. There may be some employees that will transition to the new owner’s business, which can be costly to the seller if not thought through well. If there is a lease, you may have significant responsibilities as the transferor (assignor) of the lease. If your lender holds secured interest over the business or any equipment, this will also need to be handled. The sale of larger businesses generally involves more complex leasing arrangements, tax considerations or large-scale employee transfers.
Non-Disclosure & Non-Compete Agreements and Securing Confidential Information and Trade Secrets.
Trade secret information is a subset of confidential information. All information that qualifies for trade secret protection is confidential information. But not all “confidential information” is a trade secret. Business owners need to protect their business by securing all confidential information and ensuring all employees abide by the policies and procedures in place to protect it. A company seeking to enforce its rights to protect its own confidential and trade secret information will most certainly want to have a carefully drafted confidentiality/NDA agreement.
It will also want to evaluate how other employment-related agreements — such as arbitration agreements — might impact the company’s options in enforcing the NDA, or in initiating an action against a former employee and his or her new employer. Ideally, an employer will have written agreements with its employees that are well crafted and likely to be upheld and enforced and still afford the employer the greatest degree of flexibility in the event that the employer needs to initiate action against a former employee and a third party.
Employment Law for Businesses
Employment law is a broad area encompassing all areas of the employer/employee relationship except the negotiation process covered by labor law and collective bargaining. As an employer, you need to know how to manage and handle employee disputes within the bounds of the law. Amongst other things, you should be aware of current wage and hour laws, workplace safety, employment discrimination prevention, family leave policies and laws regarding privacy in the workplace. We can prepare policies and procedures, employment agreements, executive compensation and incentive compensation agreements, stock option plans and consulting agreements.