Should You Hire a New Jersey Lawyer?
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One of Shakespeare’s characters in Henry VI, states “First thing we do, let’s kill all the lawyers”.
This line has been misunderstood, and it is actually praise to the legal profession. But that’s for English lit class. If you are buying or selling a business, you are going to need a lawyer to represent you. You should be aware of what legal tasks need to be handled if you are a buyer. There is usually less legal work involved if you are the seller, and this article has been written from the buyer’s perspective.
Review the Contract
As a buyer, your NJ attorney should review the contract of purchase and sale that is usually prepared by the seller’s attorney. If you are not sure what criteria to use in your NJ attorney selection, ask here. Generally, there will be a number of issues that must be negotiated between your attorney and the seller’s attorney. These include leases, non-compete agreements, lien searches, your term of employment, if any, transfer of security deposits, State licenses that might need to be transferred, and how accounts receivables and accounts payables will be dealt with. This article is too brief to deal with all of these issues, but two of the most important ones are the non-compete agreement and the employment agreement.
The Non-Compete Agreement
The non-compete agreement legally obligates the seller to not engage in their current occupation for a specified period of time within a certain geographic area. The non-compete agreement must be reasonable in scope with respect to both time and geography. The buyer must also pay the seller for the non-compete, and prior to closing, an allocation is made concerning how much of the purchase price is to be allocated to the non-compete. The valuation of non competes is beyond the scope of this article.
The Employment Agreement
The buyer will probably require that the seller works for you for a certain period of time. This period of time might be from several weeks to several years, depending upon the business and the buyer’s prior industry experience. A great deal of what the buyer is paying for is the seller’s expertise and business connections. During the seller’s term of employment, they are entitled to reasonable compensation for services rendered. Reasonable compensation generally means what an outside non-owner employee would be paid to provide the same, or similar services, as will be required of the seller, or former owner.
A business attorney is important for your enterprise all the way from start up to dissolution. He or she is going to help you secure a trade name and incorporate your business, explain to you relevant and important business laws and finally guide you when you want to close or wind down your business. Therefore, before you start your small business, ensure you consult an attorney for legal advice.
Business Law Governance
There is a lot that your small NJ business stands to gain if you have a legal advisor that is always by your side. These are some of the ways that an attorney is going to help you to achieve your business objectives all the way from the start until you wind up by explaining to you small business law.
Business Start Up
Managing Your Business
Each enterprise is governed by small business law to ensure it does not adversely affect people that depend on it or come into contact with it. For example, starting a maritime business requires you to comply with maritime legislations. Investing in mining business will also require that you comply with environmental laws.
Some of the important business laws that your NJ small business attorney will bring to your attention are the following:
– Contract law – that ensures all agreements made and signed are adhered to. It also explains the consequences of contract breaching.
– Employment law – this one regulates how you deal with your employees; their wages, terminal benefits as well as issues relating to hiring, harassment and dismissal.
– Environmental law – explains your business obligations towards the environment.
– Insurance and liability – what your business stands to lose or gain should you be accused or accuse other parties.
– Intellectual property law – safeguarding originality, creative ideas and patents.
– Tax laws – this governs various taxes that affect your nature of business.
Be sure to give careful thought and consideration to the selection of an attorney when purchasing a business. At the minimum, they should have small business transaction experience, and have some knowledge of your industry. We have found that legal fees will generally be $3,000 – $5,000, but Crown Business Brokers, LLC is in the New York area, and this will vary greatly according to the region of the country.
This article is not intended to be a rendering of legal, accounting, tax or other professional advice. Assistance from a competent professional in these specific areas should be sought.