Ethos Business Law

Recently, I was working with a client looking at a potential investment.  As I was pouring over the diligence, I noticed some interesting and unfortunate trends.  By using quick and simple ratio analysis, I was able to determine that the business was not as healthy as initially thought, nor as the sellers portrayed.  A few simple calculations saved my client significant purchase price dollars and buyer’s remorse once they acquired a business in serious trouble.

I think it is important that all business people (including lawyers) be able to understand, digest and interpret basic financial statements.  If you are not familiar, I have set forth below a few key financial ratios that you can use to assess the financial health of a business: (more…)

One of the most important concerns facing business owners today is how to effectively transfer the business to the next generation of family, a key employee or a new owner.  Business succession planning seeks to create a plan to manage all the aspects of the transfer, making sure the transition is smooth and non-disruptive to the business.  In family businesses, one of the most important aspects of business succession planning is making sure communication lines are open and the relationships are appropriately addressed.  Unfortunately, too often succession planning is not addressed early enough or neglected completely resulting in significant complications at the time of the desired transfer.  Succession planning should be considered well before the anticipated exit time so that proper planning and structure can be put into place.  Below are 10 important issues to consider when think about business succession planning. (more…)

You have probably heard that observing corporate formalities is very important to protect you from “piercing the corporate veil” but what does that really mean and what should you do as a business owner or manager to ensure corporate formalities are complied with in an appropriate manner? (more…)

Unfortunately, many private companies don’t pay close attention to the importance of a strong board of directors, including who to put on the board.  Owners often think of this role as perfunctory and/or not necessary.  On the contrary, a strong board of directors can be vitally important to a small, medium or large company and depending on the size of the company, the board can play different roles.

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