LEGAL SERVICES FOR NEW BUSINESSES AND START-UPS IN ATLANTA
QUESTION: WHY DOES MY BUSINESS NEED A LAWYER RIGHT NOW?
ANSWER: SIMPLY PUT... 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 constating documents - not just to establish the rights and responsibilities of the early shareholders and members, but so that the new business can later properly add new shareholders and members, is properly positioned to take advantage of appropriate and beneficial tax strategies, and can 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 later, helping our Clients realize the highest possible value. We have sold our Clients’ businesses to the top players in technology, and we know precisely what is required to get you top dollar when you 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 keep you legal and to make sure your innovation does not walk out the door;
- Preparation of all NDAs, non-disclosures, confidentiality agreements, as well as all intellectual property assignments and transfers, so that your intellectual property and IP are actually yours;
- Negotiation and preparation of all business contracts so that your revenue stream is secured;
- Minimization of litigation, risk, and uncertainty;
- Simplification of bookkeeping and accounting and the performance of your business so that you can focus on sales and revenue capture;
- Helping you remain true to your brand and your mission;
- Representation on litigation risks and actual litigation; and
- Preparation of your business to always 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, your business will never be able to realize the highest valuation - which means that you will lose the opportunity. obtaining the highest possible sale price for your business.
Mistakes can be expensive to clean up; other mistakes, especially those involving securities (the issuance of shares of the corporation or membership in the LLC) 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 (all shares), prepare all constating documents, issue shares of stock to the shareholders and member-interest holders, submit the required Notice to the legal organ (typically a specified newspaper), 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
AVOID SUDDEN UNSIGHTLY SURPRISES
We prepare Shareholder Agreements and Operating Agreements, which are contracts among the shareholders or LLC members (partners) which define the rights and responsibilities of the shareholders and members, and prepare for many different contingencies, which may include death, divorce, and disability, as well as how revenue will be re-invested and distributed.
These are important considerations, because, for example, in the absence of a written provision signed by the spouse, in a divorce, 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 death, in the absence of a properly drafted Shareholder Agreement or Operating Agreement, shares or membership of your business can also suddenly and surprisingly 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 addresses issue, the remaining shareholders or members can now be saddled with a tremendous amount of work that they did not anticipate because of the disabled shareholder’s or member’s unavailability.
As for the family of the deceased or disabled, they can be at 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 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, BECAUSE THE BUSINESS MAY DO ONE OF THREE THINGS.
First, the business may become successful enough on its own to not need financing. We recommend this very strongly, because early financing terms are usually very expensive and very onerous because of the high level of risk. It is often better to start small, work the business from home before leaving full employment, to be sure that the business has some opportunity of success. Clients are always pleasantly surprised when this occurs.
Second, the business may not need financing right away and, through organic growth, may develop its own revenue streams --- which can provide an opportunity for better leverage when financing absolutely is necessary. More often than not, the organic growth suggests different demands and business altogether, and shakes out members whose work interests are not aligned with the revenue goals.
Third, as sometimes happens, as time passes, the shareholders and members decide they want to move in a different direction – and they are grateful not to be bound to repayment of a loan in a business which no longer interests them.
We review financing options with you, and the documents provided by banks and private sources to determine your business’s best opportunities. Sometimes we tell our Clients to hold off, and grow the business further before taking any venture capital monies, because with growth, your business may have more leverage for better terms. VC money is very expensive money and typically has terrible and unfair terms; it is usually better to grow the 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 market. Our Clients - software developers, engineers, innovators, entrepreneurs, scientists, medical doctor, dentists, chiropractors - all 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.