FinleyLawyer

FinleyLawyer
Business, Divorce & Injury Lawyer

Sunday, April 22, 2012

Purchase and Sale Agreements, Buy and Sell Business - Thomas P. Finley- Attorney

Purchase and Sale Agreements, Buy and Sell Business - Thomas P. Finley- Attorney

Buying or selling a business can be extremely complex and can deal with a large variety of issues.  The complexity of the sale or purchase of a business will depend on the legal status of the business and the condition of the seller and buyer in addition to issues and agreements as to how the purchase or sale is structured.   The parties to a purchase and sale agreement might have special considerations such as covenants not to compete, employment contracts, intangible property rights, retirement plans, and indemnification provisions that are needed to name a few.  Dallas business contract lawyer Thomas P. Finley will draft an agreement for the purchase and sale of a business with the information provided by the client based upon terms previously agreed upon by the buyer and seller.  Contact me for a consultation.
 
The following is a brief summary and general overview of some of the considerations in the purchase and sale of a corporation.   
 
Purchase and Sale of a Corporation
When a company is incorporated, a sale or purchase an incorporated business may be achieved either by selling or buying the corporations assets or by selling or buying the stock owned by individual shareholders.   The purchaser or buyer of a corporation may be one or more individuals, a partnership, another corporation, or some other business entity.   When considering the purchase or sale of a corporation, certain corporate approvals and possibly government approvals may be required when another corporation is the purchaser or buyer.   Close corporations usually have a shareholders agreement that may have restrictions on the purchase or sale and stock certificates with restrictions.  Subchapter S corporations have certain restrictions under provisions of the Internal Revenue Code.  In addition, the sale of a corporation may trigger rights under related agreements of the corporation.

The purchase and sale of a corporation can be achieved by the purchase and sale of the stock of the corporation or the purchase and sale of the assets of the corporation.   Purchase and Sale of Shares of stock.  When buying or selling the shares of stock, all or part of the corporation’s shares might be sold.  A sale of all the corporation’s shares of stock at the same time to the same purchaser or purchasers constitutes a sale of the business.  The buyer or buyers become the owner(s) of all the corporations assets and usually assume known as well as unknown liabilities of the business.   Purchase and Sale of Assets.  When buying or selling the assets of the corporation, the shareholders of the corporation may agree to sell some or all of the assets of the business and not their stock.  If substantially all of the assets of the corporation are sold to a purchaser and the sale is not in the usual and regular course of business the sale requires approval of the board of directors and a minimum of two-thirds vote of the shareholders of the business, unless provided otherwise in the certificate of formation, in accordance with  Tex. Bus. Orgs. Code 21.457.   Additionally, minority  shareholders may have the right to dissent to the sale and to force the selling corporation to value their shares and purchase them at the established value in accordance with Tex. Bus. Orgs. Code 10.354.   A sale of a corporation’s assets generally subjects the purchaser to the corporations liabilities only if the purchaser specifically assumes the liabilities or as provided by statute Tex. Bus. Orgs. Code 10.254(b).

Monday, April 16, 2012

General Overview of a Limited Partnerships - LP - Lawyer Thomas P Finley

Limited Partnership Formation, Forming, Form, Limited Partnerships- Lawyer Thomas P Finley

Definition and General Overview of a Limited Partnership – LP – Ltd.
A Texas limited partnership consists of one or more general partners and one or more limited partners. The general partner or general partners will have control of the day to day operational and control of the limited partnership and any other matters allowed the general partner as set forth in the Limited Partnership Agreement.  Although the limited partnership agreement is not filed for public record, the limited partnership must file a certificate of formation with the Texas Secretary of State. Pursuant to Section 402.001 of the Texas Business Organizations Code (TBOC), the TBOC governs the formation of all new domestic limited partnerships as of January 1, 2006.

A Texas limited partnership is an entity formally created under Texas law where the limited partners can receive liability protection. The limited partners can only receive liability protection by filing a Certificate of Formation of Limited Partnership with the State of Texas pursuant to Section 3.001 of the TBOC.   It is recommended that all limited partnerships have a limited partnership agreement. Limited partnership agreements are drafted to clearly define the rights and responsibilities of the general partner in addition to the matters upon which the limited partners will have control or a vote regarding the operations of the limited partnership.  Active management of the limited partnership is the responsibility of the general partner and limited partners should not participate in active management of the partnership.  A general partner in a limited partnership has the same liability as a partner in the ordinary partnership but a limited partner, as the term indicates, may not be liable to third parties beyond the amount of his or her stake in the limited partnership unless he or she exercises substantially the same powers as those of a general partner by participating in the management and control of the partnership. This makes the purchase of a limited partnership attractive for an individual looking to invest in a business without either participating actively in management or risking liability beyond the initial investment.   However, a limited partner but can be employed by the partnership. In consideration of the non-participatory financial capitalization of the limited partners the general partner accepts liability and responsibility for the partnership.  As a general rule, it is advisable that the general partner be a corporation, limited liability company (LLC), or another limited partnership because the general partner is ultimately liable for all the debts and obligations of the limited partnership. Limited partners invest in the limited partnership without risk of liability beyond their initial contribution as set forth in the limited partnership agreement.  Contact Business Lawyer Thomas P. Finley for assistance in forming your Limited Partnership. 

Limited Partnership Formation, Forming, Form, Limited Partnerships- Lawyer Thomas P Finley

Limited Partnership Formation, Forming, Form, Limited Partnerships- Lawyer Thomas P Finley

Tuesday, April 10, 2012

Collaborative Law Divorce Lawyer - Collaborative Law Attorney - Thomas P. Finley

Collaborative Law Divorce Lawyer - Collaborative Law Attorney - Thomas P. Finley

Basic Description of Collaborative Law Divorce

Collaborative law divorce is different from the commonly known divorce in that the process is used to resolve disputes in which both clients retain separate lawyers whose only job is to help the clients settle their disputes.  The collaborative process encourages open communication between the clients and their respective lawyers.  Both the parties and the attorneys for the parties in the divorce agree to work together in a collaborative manner.  All participants, clients and lawyers, also agree to be respectful and honest and to participate in good faith to try to reach an agreement that will be in the interests of both parties.
Collaborative law divorce is unique from standard divorce litigation in that if the case does not settle in the collaborative process, the lawyers must withdraw and cannot participate in court proceedings.  The written agreement in the collaborative divorce process that the attorneys will not go to court allows both the attorneys and the clients to approach and reach a resolution of the divorce in different ways not usually considered in a standard divorce.   Another attractive feature of collaborative law divorce for many clients is the fact that the proceedings are conducted in private as opposed to the courthouse except for the final “prove-up” of the divorce. I recommend divorce clients to review the Comparisons of Litigation and Collaborative Law Process written by the Collaborative Law Institute of Texas.

Monday, April 2, 2012

FORMATION OF A CORPORATION

1.            Will the company be For-profit, Close for-profit, Professional (PC), Close (PC), or Nonprofit (NP)?

2.            What is the proposed name for the corporation?  It is best to provide your preferred name and two alternatives.  For-profit and close corporation names must include the words "company", “corporation”, “incorporated”, “limited”, or an abbreviation.  Professional corporation (PC) names must include “professional corporation” or an abbreviation.  Nonprofits require no special words.

3.            What is the purpose of the corporation?  Most corporations that I assist in formation are a corporation formed for “For-profit” and for “any lawful purpose”.

4.            Corporations For-profit, close and professional corporations must provide the total shares of stock authorized and the Par value of the shares.

5.            Who will be the Registered Agent for the corporation and what will be the registered office street address for the corporation?  A Registered Agent must consent to serve as registered agent for the corporation.

6.            How many initial Directors will the corporation have (at least 3 for nonprofits and at least 1 for all other corporations), who are the initial Directors, and what are their complete addresses?

7.            Are there any special clauses that need to be added to the Certificate of Formation?  For example, voting , Subchapter S status, Close corporation, and other special clauses.

8.            Will the corporation need corporate books and/or shares or stock certificates?  Will there be custom clauses needed for the certificates?

9.            What will be the principal place of business of the corporation after formation?

10.          When will be the Organizational Meeting for the corporation?

11.          Who will be the Organizational Meeting Chair person and meeting Secretary?

12.          Who will be the Officers of the corporation such as President, Vice-President, Secretary, Treasurer?  President and Secretary designations are required for all corporations.  For nonprofits they cannot be the same person.

13.          For regular corporations, close corporations, and professional corporations what will be the per-share price of shares to the initially issued at the organizational meeting?   What  is needed here is the Shareholder name, Number of initial shares, and Nature and value of  payment of the shares. 
  
14.          Does the corporation have a banking resolution?

15.          Will there be any custom clauses or documents needed to be attached to the Bylaws and/or Minutes at the organizational meeting?

The above is a general overview of the questions I ask clients when forming a corporation.  I can also assist clients in the formation of a Limited Liability Company (LLC) and the formation of a Limited Partnership (LP). 

Contact me to discuss the general questions and checklist above to form a corporation and schedule an office appointment with me to begin formation of your corporation.  

Contact Business Formation Lawyer – Business Formation Attorney Thomas P. Finley, Jr. to request a consultation for forming your Corporation.