“50% of all marriages end in divorce.” We have all heard about the divorce rate in America. But, did you realize that many business relationships end in divorce as well? Business partners often have ties to each other that are as significant (or more significant) than those of married couples. Thought and planning as you structure your business relationship can save you from significant stress and expense in the event of a business divorce. Moreover, thoughtful planning on these issues will help flush out potential problems in advance and allow you to resolve them before they lead to a business divorce.
Here are a few items to think about so that your business can avoid a business divorce:
Have you worked with an attorney to formalize the relationship with your business partners?
Do you have a Shareholder Agreement or Member Control Agreement? Is is current and up to date?
Do you have a buy-sell arrangement? Is is current and up to date?
Have you agreed upon transfers of equity and succession plans?
Do you have a current valuation for the business?
Have you been keeping accurate corporate records?
Have you considered life insurance for the business owners?
Do you have a dispute resolution process in place?
If you are thinking about a business venture with another person, or currently have one or more business partners, you really need to address these items as well as others so that you are prepared for your business partnership and mitigate the possibility of a business divorce.
For more information, please contact attorney David Baer at david.baer@ethoslaw.com or 612.767.3311.
In a previous post, here, I discussed the importance of a board of directors for private companies. I want to dig a bit deeper into the specific issue of who you should invite to be on your board of directors. While at first thought this might be a resting spot for executives, friends and family, thinking more strategically about your board composition will provide significant advantages to your business. (more…)
Here is a follow-up report by CBS News on the hidden dangers of digital copiers. The original report is here. Massachusetts Congressman Ed Markey called for an investigation by the Federal Trade Commission — concerned most Americans don’t know their information can be compromised. “We have to do a lot more to insure that the public and corporations know this,” Rep. Markey said, “and that absolute security is applied to copy machines across our country.”
Did you know that most digital copiers have a hard drive? Did you know that every copy on these machines is recorded and stored on that hard drive. So, what happens when that copier (and hard drive) leaves your office? Take a look at this CBS News report:
Bottom line: make sure you take appropriate precautions to erase the hard drive when you get rid of your digital copier.
As the end of the year fast approaches, our thoughts turn to holiday cheer and family fun! However, it is also important to think about a few simple pieces of annual corporate maintenance to protect you and your company. Two important and often overlooked items include filing the annual registration for your company and holding your annual meetings. (more…)
According to a recent article from the Wall Street Journal, some new cases have begun to erode the long-standing view that personal emails sent from a work computer can be monitored by employers.
In the past, most courts have treated corporate computers, and anything on them, as company property. However, in recent rulings, courts have begun to investigate the circumstances around disclosure of policies to employees and other factors. For example:
In New Jersey, an appeals court ruled that an employee of a home health-care company had a reasonable expectation that email sent on a personal account wouldn’t be read.
In San Francisco, a federal appeals court ruled that employers that contract with an outside business to transmit text messages can’t read them unless the worker agrees.
While it is probably too early to make any sweeping generalizations about this trend, it certainly suggests that employers need to review their policies, practices and training to make sure they do not run afoul of this evolving issue.
In a recent article from Law.com, an industry observer stated “[a]lternative fee arrangements are like teenage sex. There’s a lot more people talking about it than doing it—and those that are doing it don’t really know what they’re doing. . . .” While yes, that is a juicy, headline-attracting quote, I tend to agree with it wholeheartedly.
Thanks to everyone who attended our webinar last week! There were a lot of good questions asked, and some of the answers to those questions that we didn’t have time to address will soon be posted here. For those of you who missed the webinar or those that need a re-fresher, here are the slides from the presentation.
Ethos Business Law, in conjunction with Russell Herder, is excited to offer a webinar: “Social Media: Embracing the Opportunities, Averting the Risks” on Tuesday, August 25 from 12 to 1 p.m. CT (register here).
Social media is one of the hottest topics today, with the pros and cons of its use being debated in board rooms nationwide. In light of recent restrictions on employees’ social media use (ESPN, Marine Corps, NFL), companies are discussing whether, how and to what degree they should restrict or encourage their employees to use social networking tools. This webinar will offer insight into business leaders’ views and perceptions on this issue and will provide actionable recommendations and advice on the development of social media policies and employee training sessions.
Led by Carol Russell, CEO of Russell Herder, and David Baer, president of Ethos Business Law and one of Minnesota Lawyer publication’s Attorneys of the Year, the webinar will also highlight the insights gleaned from the recent national study conducted by the two firms on social media trends in the workplace and policy adoption.
Should employees be encouraged to use social networking to enhance business outreach? Or will such activity impede productivity, increase reputational risk, and most importantly increase liability issues? These and other questions are clearly on the minds of today’s management.
Recent research conducted with Russell Herder found eight in 10 businesses have concerns about the potential liabilities of social media. Yet, only one-third have a policy in place to govern social media use, and just 10 percent said they have conducted relevant employee training.
Instead of ignoring the need for responsible guidelines, organizations of all sizes should begin to define their strategy regarding social media, and most importantly, the rules for employee engagement. By doing so, management can take advantage of the benefits offered by these new communication channels while mitigating undue risk. But remember, social media is a far different animal than traditional technology. A company’s current policies on IT matters are usually not sufficient.
All companies are different, thus the rules for creating and implementing a social media policy are not universal. They must take the form, substance, philosophy and culture of the organization to which they apply. However, the following are some important elements to include in a good social media policy:
