Philadelphia Business Lawyer Sarah E. Holmes
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Why Your Commercial Lease Needs A Covid 19 Clause

11/30/2020

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3 Ways Your Business Can Survive Another Lockdown

11/23/2020

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With many areas heading again into lockdowns and severe business restrictions, business owners are again scrambling to survive.  

In this video, we present a few ways business owners can try to mitigate this latest round of business closures and restrictions.


If your business is looking for some help getting through the restrictions and needs some legal advice, feel free to reach out to our office at: 215 482 0285.
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How to Purchase a Business for Sale: Best M&A Tips for Buyers

11/17/2020

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Even with the challenges of the coronavirus pandemic, business still continues and new opportunities present themselves every day. Buying an existing business is a common approach to expanding your market share or entering into a new market.

Business purchase transactions – otherwise known as mergers and acquisitions – tend to be complex whether you're the buyer or the seller. While a seller may be intimately familiar with the operations and finances of a business they’ve built themselves, an outside buyer must take care to do all the proper due diligence before purchasing.

As a buyer, you usually have only a limited time to evaluate and appraise every important factor of the business you're looking to buy. Once you complete the sale, you become responsible for any liabilities owed by the business you just bought. If you overlook a critical detail or fail to ask the right questions before your transaction, you may agree to a business purchase agreement that ends up costing you more than the sale was worth.

One of the biggest mistakes you can make going into a business purchase transaction is to do it without the help and counsel of a lawyer. Imagine buying a business only to find out a couple of years later that you owe thousands of dollars in back taxes or debt. A business lawyer’s job is to anticipate potential issues that may arise and address them in your business purchase agreement so that you’re covered against these types of unpleasant surprises down the road.

If you're looking to buy a Philadelphia area business or company, Holmes Business Law can help position your new acquisition for the best possible success. Call our office today at 215-482-0285 to talk to an experienced business lawyer about your options.

How Do You Buy an Existing Business?Buying an existing business involves several steps that may vary depending on the approach you choose to take. Your business lawyer can help you navigate the many decisions you’ll have to make throughout the buying process.

First, you must choose how to structure your deal.
  • Do you want to pursue a merger between your company and another?
  • Would you like to acquire part or full ownership through a stock purchase?
  • Or do you want to just purchase another company's assets?
This decision will affect the income tax and liability aspects of the transaction. Your attorney can work with your accountant and other tax counsel to figure out your best path forward.

Once you choose the type of deal you want to pursue, you must determine the purchase price that you’ll propose to the seller. Here, you’ll likely have to involve the expertise of business appraisers, investment bankers, accountants, and other valuation specialists at the direction of your lawyer. Based on your bargaining power, liquidity, and risk tolerance, you can offer the seller cash, equity, debt, assets, or a combination compensation package.

Once you've determined your strategy, your lawyer will draft a letter of intent (LOI) to present to the seller for both sides to sign. The LOI should cover:
  • The purchase price and details of the deal structure,
  • The necessary due diligence to move the transaction forward,
  • A statement of both sides’ expectations going into the purchase agreement,
  • The anticipated date of closing the sale, and
  • Any other important terms as discussed by the parties.
Letters of intent cover the tentative terms on which both parties expect to agree. LOIs generally aren’t legally binding, so the terms of the final purchase agreement can change over the course of negotiations. However, some LOIs may be written like contracts, with binding terms. Others can be a combination of binding and non-binding conditions.

Due Diligence Checklist for Buying an Existing Business

The due diligence process involves an in-depth investigation of the company you plan to buy. Every business purchase transaction is unique, but some common considerations include:
  • Are the company’s state LLC or corporate filings current and up to date?
  • Has the business filed and paid all its federal, state, and local taxes?
  • Are there any unfavorable reviews or negative claims against the business online?
  • Does the company hold any product patents or trademark registrations for logos or slogans used in the promotion of its goods or services?
  • Does the business have solid contracts with important suppliers and customers?
  • Does the business have firm leases for all of its operational facilities?
  • Are employees prohibited from disclosing confidential company information?
  • Does the company's employment agreement incentivize its employees to stay and stop them from competing with the business or soliciting away any of its clients?
  • Are the company's internal and employee policies current?
  • Are the company’s financial statements sound and up to date?
  • Is the company currently the subject of any lawsuits or government investigations?
The due diligence process is critical from the buyer's perspective because you become responsible for all of the company's liabilities once the purchase is complete.

Failing to properly investigate the company you want to buy could leave you with unexpected financial and legal problems – with costly losses after the fact. Your investigation may even reveal dealbreakers that lead you to ultimately walk away from the transaction.

What Should Be Included in a Business Purchase Agreement?
Your lawyer’s job is to draft a business purchase agreement that accurately reflects the terms of the deal as agreed between you and the seller. The document helps protect both the buyer and seller from legal and financial risks that may come up after the business sale.

Your business purchase agreement should include:
  • Restrictive clauses – such as covenants not to compete, confidentiality clauses, non-solicitation clauses, and non-disclosure clauses.
  • Liabilities assumed by the buyer – such as any outstanding loans, unpaid vendor invoices, mortgage payments, or accounts payable balances.
  • Assumption and assignment agreements – detailing the terms of the sale and how to distribute assets, liabilities, and lease terms between the parties.
  • Sale of assets – consented to and signed between the seller and buyer.

Depending on the specifics of the business you're buying, you could have additional provisions such as training and transition agreements or consulting or employment agreements. These keep the seller on board to help manage the business through the sale.

You may have to file other paperwork in addition to executing your business purchase agreement. That could include updating secretary of state filings, changing the operating agreement, change in ownership forms for franchises, or resolutions authorizing the transaction from an entity’s board of directors or shareholders.

Talk to a Philadelphia M&A Attorney Today

No matter what industry you’re in or looking to get into, buying a business is a major undertaking with a lot at stake. You want to set yourself up for your best chance at success. That means taking stock of a great number of moving parts – financial, legal, and regulatory.
​

An experienced business lawyer can help you pursue your goals with your best interests in mind. Every business venture is unique. Call the Holmes Business Law Philadelphia office today at 215-482-0285 to discuss your options with a business lawyer dedicated to your vision.

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How Can I Protect My Business Against Employee COVID-19 Lawsuits?

11/3/2020

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In Pennsylvania, the first COVID-19 employee wrongful death lawsuit was filed on May 7, 2020. The lawsuit argues that the employee’s exposure and death from coronavirus was “predictable and preventable” by their company. The worker’s surviving family claims the company should’ve taken better precautions to protect its employees.

While COVID-19 has affected all of us, small, local, and medium-sized businesses are bearing the brunt of the coronavirus pandemic. Most smaller companies don’t have the same margins and resources as larger companies and corporations. A single employee COVID-19 lawsuit could make the difference between your business surviving the pandemic or not.

Despite your best efforts, what if one of your employees gets COVID-19 and they claim they got exposed on the job? Is the law going to hold you, the business owner, responsible?

The answer depends on your state's COVID-19 response, workers’ compensation requirements, and business tort laws. If your state's workers’ compensation laws cover COVID-19, then your workers’ compensation insurance can shield you from liability. But you may still need to take other measures to protect yourself and your workers from coronavirus exposure.

The best way to shield your company from expensive coronavirus liability is to speak to a local Philadelphia-area business lawyer about your options. Skimping on the legal foundations of your business now can hurt you later on down the line.

Every business is different, with unique operational structures and needs. At Holmes Business Law, we create solutions catered to your company and your industry. Call our Philadelphia business law firm at 215-482-0285 now to discuss your company’s best path forward.

You can also read our other posts in this COVID-19 business series:
  • Do you need a coronavirus liability waiver for your business?
  • What cancellation and rescheduling policies does your business need for COVID-19?
  • How can you terminate your commercial lease in a COVID-19 world?
  • Can force majeure due to COVID-19 get me out of a contract?

How to Protect Your Company from Employee COVID-19 ClaimsThe recent Pennsylvania lawsuit is a warning for employers not to overlook worker safety during COVID-19. The legal action accuses the company of misrepresenting the risks of the pandemic to employees and ignoring state and federal guidance on coronavirus protocols.

Specifically, the employee’s family is suing the company for:
  • Failing to give workers proper PPE while doing their job,
  • Forcing workers to work closely in confined spaces,
  • Allowing common areas to become crowded,
  • A work culture that made employees fear taking sick leave,
  • Playing down the risks of exposure on the worksite,
  • Failing to test workers or contact trace to monitor exposures.
All while the company knew the risks of the coronavirus pandemic. Pennsylvania law allows workers to sue their employers based on fraudulent misrepresentation of workplace hazards. 

At this point, business owners should reasonably be aware of pandemic risks. To lower your risk of liability, you should follow local, state, and federal COVID-19 laws and guidelines. Most businesses that are allowed to operate can only do so if they take the proper precautions to protect their employees and customers from coronavirus exposure.

Depending on your company’s location and operations, that could mean:
  • Implementing screening protocols like temperature checks
  • Providing enough of the necessary PPE for all of your employees
  • Increasing cleaning and sanitization protocols
  • Requiring masks to be worn on the premises
  • Reorganizing your office or operations space to allow for social distancing
  • Closing or lowering the capacity of common areas like break rooms and cafeterias
  • Immediately taking action to stop the spread of the exposure at your workplace
If your employees can perform their job duties from home, the safest action may be to encourage them to telecommute. Unfortunately, some businesses – like restaurants, retail stores, or service-based industries – don’t have that option.

Talk to a business lawyer today about the steps your company should take to protect yourself, your employees, and your shareholders. An experienced legal professional can provide creative solutions that you might not have considered otherwise. Creating a sound plan now can set you up for success and help you avoid further trouble in the future.

COVID-19 and Workers’ Compensation InsuranceWorkers’ compensation laws help protect businesses from lawsuits by employees who get injured or sick at work. Most companies with employees must have some type of workers’ compensation insurance to make sure that their workers are covered.

The question is whether coronavirus falls under workers’ compensation coverage.

Some states have a workers’ compensation exclusion for “ordinary life diseases” like the common cold or flu. Washington state, for example, recently excluded COVID-19 illness from its workers’ compensation laws. As of March 20, 2020, the Pennsylvania state website classifies COVID-19 illness as an “injury or occupational disease” that qualifies under workers’ compensation “depending on the type of work performed.”
If that sounds vague to you – you’re right. The novel coronavirus is so new that the law around it is being written as we speak. Contact a Philadelphia-area business attorney for a better idea of what to expect for your business moving forward. Your lawyer can determine the risks you face and help you implement a safer, more coronavirus-resilient business strategy.

Nobody could’ve foreseen the effect that COVID-19 would have on the world. As we round out the seventh month of the pandemic, it’s clear the coronavirus is here to stay and we must adjust to protect ourselves and the people around us.

A good business attorney will help you:
  • Assess your risks based on your industry and business operations
  • Anticipate and avoid potential legal issues now and for the foreseeable future
  • Implement policies that protect you and your workers
  • Comply with OSHA’s Guidance on Preparing Workplaces for COVID-19
  • Follow the CDC’s Interim Guidance for Business and Employers 

​As the pandemic continues, it will probably lead to no small amount of lawsuits. Although there’s no blanket guarantee to avoiding liability during COVID-19, you can take reasonable, actionable steps to reduce your legal risk. Call the experienced Philadelphia attorneys at Holmes Business Law today at
215-482-0285 to schedule your consultation.

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    Author

    Sarah E. Holmes is a Philadelphia business attorney and strategist that helps start ups and established businesses looking to expand, protect their assets and increase their profits in an approachable, down-to-earth way.  When you're looking for a business lawyer in Philadelphia, the Main Line or New Jersey, we can help.

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Holmes Business Law, P.C.
​Two Convenient Locations- Main Line and Center City
40 E. Montgomery Avenue (all mail)
4th Floor
Ardmore, PA 19003
and
1515 Market Street
Suite 1200
Philadelphia, PA 19102
215-482-0285
 

info@phillysmallbusinesslawyer.com

All site content is subject to copyright 2021 by Holmes Business Law P.C.
This website and its content herein constitutes attorney advertising.  Any content on this website should be construed as informational, not legal advice.  No information on this website is intended to create an attorney-client relationship.  Only a signed fee agreement between Sarah E. Holmes and the client will establish an attorney-client relationship.  Use of any information on this site is provided "AS IS" with no warranty of any kind, either express or implied.  Always consult with a licensed attorney in your own state for legal advice.
Photo used under Creative Commons from AK Rockefeller
  • Home
  • Attorneys & Areas of Law
    • Business Entities >
      • Corporations
      • Limited Liability Company (LLC)
    • Business Immigration
    • Business Purchase or Sale
    • Raising Capital & Investor Agreements >
      • Promissory Notes and Debt Financing
      • Private Placement and Equity Financing
    • Business Contracts >
      • Consulting Agreement
      • Employment Contracts
      • Independent Contractor (1099) Agreements
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