Small business

What To Do If An Owner of A Business wants to Transfer its Interests

by Fred Abramson

What To Do If An Owner of A Business wants to Transfer its InterestsNew Yorker\‘s are a mobile bunch. Espe­cially New York busi­ness own­ers. Busi­ness open and close every day.  It is risky to believe that your co-owners will still be with you five years down the line. It is likely that there will come a time when of your co-owners will want to sell his shares or inter­ests in the com­pany to some­one else.  One of the most com­mon ways that a small busi­ness can get dis­rupted is when an owner desires to sell or trans­fer his inter­ests in a com­pany. So, what should you do?  You should cre­ate in advance a method for the own­ers to review and block any that is not in the best inter­ests of the com­pany.  Here are some things you should think about:

  1. Right of First Refusal. This is the most com­mon pro­vi­sion in a buy-sell agree­ment. The owner who wishes to sell his inter­ests first offers it to his co-owners before any­one else.
  2. Decide the Price of the Own­er­ship Inter­ests in Advance. Often the price will be set at the price a pro­posed out­side buyer has bid.  I do not rec­om­mend this option because a fraud­u­lent offer is pos­si­ble. Another method is to set a pre-determined price at the time a buy-sell agree­ment is drafted.  Another option is to set a high down pay­ment price which would show good faith.
  3. Make clear the effect of any sale on Minor­ity Own­ers. Often a right of first refusal pro­vi­sion may freeze out a minor­ity owner from sell­ing his inter­ests.  As a result, it may be impor­tant to include a \“Right to a Forced Sale\” clause.
  4. Decide who can buy the inter­est. Should the com­pany have the right to pur­chase shares or the indi­vid­ual owners?
  5. Should an owner be able to give away his inter­est? Often own­ers wish to grant their inter­ests in a com­pany to a trust for estate plan­ning rea­sons. This could be prob­lem­atic because tech­ni­cally the trust would own the shares of the busi­ness. Often these issues are addressed when draft­ing a buy sell agreement.
  6. No Trans­fer Restric­tions. Refus­ing to trans­fer any own­er­ship inter­est is another pos­si­bil­ity. This can lim­ited in a few dif­fer­ent ways, such a no trans­fers to cer­tain per­sons and no trans­fers with­out writ­ten con­sent of the other owners.

You should decide in advance what to do if an owner of a busi­ness wants to trans­fer its inter­ests through a buy sell agree­ment to avoid unnec­es­sary prob­lems and poten­tial litigation.

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What To Do If An Owner of A Business wants to Transfer its Interests

Small Busi­ness Gen­eral Coun­sel Plan

by Fred Abramson

Are you sur­prised by all the paper­work and details involved in get­ting a new small busi­ness up and run­ning? It’s incred­i­ble, isn’t it?  There are many deci­sions you have to make, expenses that never stop, and every time you think you’ve got a han­dle on things, some­thing else pops up.

I’ve got news for you: It doesn’t get any eas­ier.  If you are a vet­eran busi­ness owner you know that there will be more paper­work, more details, more decisions.

But guess what? It’s worth it! I under­stand how excited you are about your busi­ness and you want to do every­thing for your busi­ness to succeed.

Your busi­ness can suc­ceed, you know.  I’ve observed many start-up com­pa­nies suc­ceed.  But only sometimes.

But, I have observed many busi­nesses go bank­rupt. Some within one month.

Even though they worked hard and had the best of inten­tions, many busi­ness own­ers lose every­thing.  It’s ugly: tremen­dous debts, dreams and aspi­ra­tions dashed. Many have to return back to work for the job they hate so that they can pay off their debts.

What makes the dif­fer­ence?  Why do some busi­ness own­ers amass great wealth while oth­ers fail miserably?

As a lawyer, I am prob­a­bly not the one to tell you how to build a suc­cess­ful com­pany.  But as a busi­ness attor­ney who rep­re­sents peo­ple like you, I can tell you exactly how to make your business fail.

LITIGATION. Get­ting sued. Many busi­ness own­ers go out of busi­ness because of  a large judg­ment against them that they can­not pay.  Or, they spend so much on legal fees, it wipes them out.

Want to know some­thing else?  It’s amaz­ing, but in many cases these own­ers could have avoided the law­suit com­pletely, or pro­tected them­selves from per­sonal lia­bil­ity.  They could have survived!

All they had to do was get some legal advice. In advance.

Before they signed a lease or con­tract.  Before they took on a part­ner or hired an employee.  Before they made busi­ness deci­sions involv­ing seri­ous legal consequences.

Ten min­utes of legal advice may have pre­vented all that fail­ure, bank­ruptcy, mis­ery, and shame

But they don’t get that advice, do they?  And we both know why.

The cost.

On top of all the other expenses of start­ing and run­ning a new busi­ness, there never seems to be enough left for legal fees.  After all, legal advice is expensive, right?

Not any­more.

The Law Office of Fred­eric R. Abram­son offers fee struc­tures that is more than billable hours.

There is a way for you to have the legal advice you need at a cost so low you would be a fool to turn it down.

Here is what it’s all about:

My firm has just intro­duced what I call the “Small Busi­ness Gen­eral Coun­sel Plan.”  For a monthly retainer of only $400, you get up to two hours of free tele­phone con­sul­ta­tions and attor­ney legal doc­u­ment review every month.

You can ask all the ques­tions you want and get the money-saving, headache-avoiding answers you need. You can have me review and com­ment on con­tracts, leases, let­ters, forms and any­thing else you use in your busi­ness.  You’ll know what’s legal, what’s fair, and what’s not.  No sur­prises. No more doubts.

Do you real­ize what that means? It means you can sleep like a baby at night know­ing that your attor­ney is “on call.”  It means that you can get the answers that you need, when you need them, so you can quickly get back to run­ning your business.

It means never hav­ing to “blindly” sign any­thing that could cost you thou­sands of dol­lars more than you should have paid because you didn’t have time to read the “fine print.”  It means never hav­ing to make uni­formed deci­sions that could get you sued for hun­dreds of thou­sands in damages.

It means incred­i­ble piece of mind for you and your family.

That alone must be worth more than $400 a month to you, yet that’s all it costs.

Call me at 212–233‑0666 to get started today or ask me any ques­tions about how the plan could help you achieve your goals.

I look  for­ward speak­ing with you.

Business Law

by Fred Abramson

Hir­ing a busi­ness law attor­ney is cru­cial for any suc­cess­ful busi­ness.  As a pas­sion­ate busi­ness owner, I know that your busi­ness is impor­tant.  Your legal needs must be met so that your focus is on grow­ing business.

I pro­vide busi­ness advi­sor and legal ser­vices to entre­pre­neurs, start-up busi­nesses and other enti­ties from plan­ning and for­ma­tion to sale or other dis­po­si­tion of the busi­ness.  I will guide you through the devel­op­ment of your busi­ness plan, choice of entity and any busi­ness struc­tural decision.

Below you will find a par­tial list­ing of my Busi­ness Law Ser­vices. If you don\‘t see a par­tic­u­lar topic listed and you would like more infor­ma­tion, please con­tact my office so I can pro­vide to you the infor­ma­tion you need.

  • Draft and Nego­ti­ate Contracts
  • Buy-Sell Agree­ments
  • Pur­chase and Asset Sales Agreements
  • Employ­ment Agreements
  • Inde­pen­dent Con­trac­tor Agreements
  • Set­tle­ment Agreements
  • Con­struc­tion Contracts
  • Com­mer­cial Leases
  • Cor­po­rate For­ma­tion (Inc, C-Corp, S-Corp, LLC, LLP)
  • Cor­po­rate Min­utes and Record Keeping
  • Real Estate
  • Share­holder Agreements
  • Social Media, E-Commerce & Social Media Law
  • Non-Disclosure Agreements/Confidentiality
  • Trade­marks
  • Intel­lec­tual Prop­erty Agreements
  • Tech­nol­ogy and Ven­ture Licens­ing Agreements

Arti­cles of interest:

Busi­ness Sale:

Con­tracts:

Cor­po­rate Formation:

Social Media Law:

Start-Ups:

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