The prior post contained a quick survey of the issues that surround voting power and control of a business with multiple equity owners. Before you read this post, make sure you have read the prior post.
In this post, we will discuss a very important topic to business owners: under what circumstances can you sell your shares of a closely held business? The short answer, not surprisingly, depends on the terms and conditions in your Shareholder Agreement. (Remember that for the purposes of this series, the term “Shareholder Agreement” also refers to partnership agreements as well as operating agreements, which is the document that governs the management of limited liability companies.)
If you have acquired shares of stock of a privately held company through a Regulation D offering, those securities are likely subject to SEC Rule 144, which is a different discussion altogether. That will be the subject of a future post. For now, let’s focus on the restriction that companies typically can include in their Shareholder Agreements. These generally fall into two categories: 1) voluntary transfers and 2) involuntary transfers.
Read moreOne topic of conversation that always sparks a lot of interest is how to organize the ownership structure of the company when co-owners or investors are involved. This post begins a four part series looking at key topics to consider when organizing a company with multiple owners. In this post, we look at voting power and how it can be distributed. This topic alone could fill an entire semester in business or law school, so this brief discussion is meant as a beginning point for a review of your own business plans.
Read moreOnce upon a time, thousands of years ago, ancient peoples began the practice of making annual promises to the gods, or perhaps their king or queen about loyalty to the throne. That practice has endured to this day.
We have all made them: more exercise, weight loss, a focus on spirituality perhaps. From experience, we probably all know that by the summer, if not by the spring, that those resolutions fall by the wayside. In fact, almost 80% of such resolutions fail by February.
QUESTION: What does this teach us as business owners and entrepreneurs?
Read moreNew Jersey just made life very difficult for all employers in every industry, specifically small businesses. In New Jersey, business owners can now be criminally charged and fined up to $5,000.00 per day for misclassifying workers as independent contractors.
Running a small business can be very difficult. One of the issues that employers of all sizes struggle with is whether to classify workers as statutory employees or independent contractors. Statutory employees are paid on a W-2 basis, whereby the employer withholds federal and state payroll taxes. W2 employees have certain rights and remedies available to them under state and federal law. For example, the Pennsylvania Wage Payment and Collection Law is one of those laws.
Independent contractors, on the other hand, negotiate their work relationships with employers and have those relationships governed by contract. Those contracts can provide the worker with rights and remedies. That is one of the points under attack by this overreach in New Jersey- the freedom of contract.
Read moreThe effectiveness of any nonprofit organization- especially in the arts world - starts with a strong and well trained board of directors. This is often the weak point of smaller organizations, but it doesn't have to be that way.
In this one hour session, we'll explore the role of the board of directors in a nonprofit organization, best practices for governance of the organization, liability issues for those who serve on nonprofit boards, and basic insurance related issues.
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