NEW BUSINESS & STARTUP

LEGAL SERVICES

• Driving Business Value
• Operating Agreements
• Financing and Venture Capital
• Driving Business Value

QUESTION – WHY DOES MY BUSINESS NEED A LAWYER RIGHT NOW?

ANSWER – ADDED VALUE

It all begins with the incorporation or formation of your new s-corporation, c-corporation, or LLC. It is important to engage counsel early on to properly form the corporation or limited liability company – and to properly prepare all of the documents. It is important to establish the rights and responsibilities of the early shareholders and members, as well as providing the ability for the new business to later add new shareholders and members. You want your business to be properly positioned to take advantage of appropriate and beneficial tax strategies, and properly participate in all financing and venture capital opportunities, so that your new business can attain the highest value at all times — especially at the time of business sale.

We have taken our clients from formation to business sale in as short a period as three years. We have sold our clients’ businesses to the top performers in technology, and we know precisely what is required to get you top dollar when you are ready to sell. We provide the following legal services:

• Counsel on structure the entity should take, formation, capital, shareholders, members, and partners
• Preparation of operating agreements and shareholder agreements
• Negotiation of real estate leases and contracts
• Assistance with bookkeeping and accounting
• Negotiation of financing and equipment lease terms
• Preparation of all employee and 1099 contracts to make sure your innovation is protected
• Preparation of all non-disclosures, confidentiality agreements, and intellectual property assignments and transfers
• Negotiation and preparation of all business contracts
• Minimization of litigation, risk, and uncertainty
• Simplification of bookkeeping and accounting
• Helping you remain true to your brand and your mission
• Representation on litigation risks and actual litigation
• Preparation of your business to maximize value at business sale

One of the long-term goals of most businesses is to sell the business at the highest possible price. If the constating formation documents, or any of the key revenue-producing contracts, or even the employment, 1099, or IP contracts and assignments are improperly drafted or maintained, then your business will never be able to realize the highest valuation. This means that you will lose the opportunity to obtain the highest possible sale price for your business.

Some mistakes, especially those involving securities, are so fundamental that they can never be repaired by any lawyer at any time.

We regularly incorporate new s-corporations and form new limited liability companies, issue Minute Book and stock in the company, prepare all constating documents, issue shares of stock to the shareholders and member-interest holders, submit the required notice to the legal organ, prepare the initial director’s meeting, prepare the annual corporate and director’s minutes, counsel on shareholder meetings and director’s meetings, and assist our clients in applying for the IRS-issued FEIN and s-election.

OPERATING AGREEMENTS AND SHAREHOLDER AGREEMENTS

We prepare shareholder agreements and operating agreements, which are contracts among the shareholders or LLC members, which define the rights and responsibilities of the shareholders and members and prepare for many different contingencies, which may include death, divorce, disability, and even how revenue will be re-invested and distributed.

For example, in a divorce, in the absence of a written provision signed by the spouse, a court can award some portion of a shareholder or member’s shares to an ex-spouse, which can mean that suddenly there is a new shareholder or member who is likely not going to work in the business, may feel shortchanged and litigious, and may be fueled by anger.

In the event of a death, in the absence of a properly drafted shareholder agreement or operating agreement, shares or membership of your business can also suddenly be in the hands of someone who is completely unprepared.

In the event of disability, in the absence of a shareholder agreement and operating agreement which directly address the issue, the remaining shareholders or members can now be saddled with a tremendous amount of work that they did not anticipate due to the disability or unavailability of the shareholder.

As for the family of the deceased or disabled, they can be at a tremendous disadvantage if the remaining shareholders or members are unscrupulous. It is important to provide for these contingencies at the outset. It is very important to have expert legal counsel prepare the shareholder agreement or operating agreement that suits the needs of your business and your family.

FINANCING AND VENTURE CAPITAL

Often, the best option is to self-finance at the outset to develop the business with the resources at hand. The reason for this is that the business may go one of three ways.

First, the business may become successful enough on its own to no longer need financing. We recommend this very strongly, because early financing terms are usually quite expensive and carry a high level of risk. It is often better to start small, and work the business from home before leaving full employment so that you can be sure that it has the best opportunity for success.

Second, the business may not need financing right away and through organic growth, it may develop its own revenue streams, which can provide an opportunity for better leverage when financing is absolutely necessary. More often than not, the organic growth suggests different demands, and naturally eliminates members whose work interests are not aligned with the revenue goals.

Third, the shareholders and members decide they want to move in different directions, and they are grateful to no longer be bound to the repayment of a loan for a business which no longer interests them.

We review your financing options with you to help you determine your the best opportunities for your business. Sometimes we tell our clients to wait and grow the business further before taking any venture capital monies. Sometimes, with growth, your business may have more leverage for better terms. Venture capital money typically has costly and unfair terms. It is usually better to grow your business somewhat before taking on venture capital money.

The Fernandez Law Firm, P.C. is known for comprehensive IP and IT representation at all stages and we enjoy representing start-ups who bring disruptive innovation to the market. Our clients say that we are the best value and offer the highest quality service. The Fernandez Law Firm, P.C. has been recognized for excellence and has consistently won the highest awards and the highest customer approval rating from Martindale-Hubbell and Lawyers.com for quality of service, overall value, responsiveness, and communication ability for the years 2013, 2014, 2015, 2016.