Incorporation can be done at one of two levels: federal or provincial/territorial. When your business is incorporated, it will then be considered a legal entity that is separate from any shareholders. If you are the shareholder of a corporation, you will not be liable for any debts, obligations or any acts of the corporation. There are tax considerations with corporations and annual compliance, but these typically do not circumvent the advantages of being incorporated. If there is more than one shareholder, a shareholders agreement is imperative as it can address many issues, including cash calls if the company needs money or the removal of a shareholder or director of the corporation.
A partnership is a non-incorporated business that has been created in collaboration with two or more people. Entering into a partnership structure means that you and your partner(s) will have your financial resources combined and put towards the business. This also means that you and your partner(s) would share any and all profits of the business. While you don’t have to have a partnership agreement, it is highly recommended, as the agreement will address future disputes and disruptions in the business (i.e. death of a partner).
There are several different types of partnership:
A general partnership where each partner is equally liable for any and all debts that the partnership may face.
A limited partnership where a person is able to contribute to the business but is not involved in its operations.
A limited liability partnership is typically afforded to a group of professionals. Groups such as lawyers, financial accountants or medical professionals.
Before entering into a partnership, having a partnership agreement is crucial. A partnership agreement will establish the terms of the partnership to help avoid any disputes relating to business operations. Seeking out legal counsel can help you save both time and money moving forward with your venture.
𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗙𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻 𝗧𝘆𝗽𝗲𝘀
If you are a Sole Proprietor, then you and the business may be considered one in the same, which means you are fully responsible for all debts and any obligations pertaining to your business. As the sole owner, any profits made are entirely yours. However, as you are personally liable, any creditor can make a claim against business – and personal – assets in order to collect any debts. So, if you have a business and a home and your business is sued, your personal assets are also at risk. Furthermore, if you are operating under a sole proprietorship and want to use a business name, you will need to register it.
Through many aspects, business formation impacts how your business will function, operate and be taxed. Creating a legal structure behind your endeavour is one of the crucial first steps you can make when starting any business. There are plenty of hurdles and protocols that make the process complex. However, being advised as to the most effective and efficient structure will allow you to plan out your next steps.
In essence, with each unique respective business venture, there is a structure that best matches the entrepreneur’s plans for determining the liability of each founder, what taxes to anticipate and how they will be paid.
Each structure allows for the appointment of guidelines regarding important aspects of any business, or simply put, the decision making. For example, a sole proprietor is free to make decisions on their own, as the business is entirely their’s. However, if a member of a partnership wanted to make a crucial decision they would legally have to seek approval from other partners before moving forward. The exception to this would be a sole proprietorship. If there is more than one person working on the business, you will want a business agreement which sets out the addition of parties, the removal of parties and how the business will be run on a day-to-day basis.
𝗣𝗔𝗥𝗧𝗡𝗘𝗥𝗦𝗛𝗜𝗣 𝗗𝗜𝗦𝗣𝗨𝗧𝗘𝗦 𝗖𝗔𝗡 𝗔𝗥𝗜𝗦𝗘 𝗜𝗡 𝗔 𝗩𝗔𝗥𝗜𝗘𝗧𝗬 𝗢𝗙 𝗪𝗔𝗬𝗦
A partnership dispute has the potential to have a significant impact on a business’s profitability and the morale of any employees that the partnership may have. As a result, it is important to resolve these disputes as quickly and with as little disruption to the normal operation of the partnership as possible. There are many different ways in which a partnership dispute may arise. Some of the kinds of disputes that our attorneys routinely handle include the following:
-Terms of dissolution
-Breach of fiduciary duty
-Breach of non-compete agreements
-Breach of non-disclosure agreements
-Misappropriation of assets
-Partnership agreement disputes
In many instances, retaining legal counsel before a partnership dispute arises is the best way to avoid conflict at a later time. By consulting an attorney during partnership formation, you can ensure that your partnership agreement is well-drafted and addresses all of the various issues that may arise in the course of business. In some cases, a lawyer will alert potential partners to potential issues that they had not even considered prior to talking to an attorney. The initial investment associated with consulting with an attorney is usual far offset by the money that you will save by not having to go through costly and time-consuming litigation that could potentially destroy your business.
Partnerships are among the most utilized business formations in the United States today. At their most basic, partnerships involve two or more people conducting some type of business for a profit. Partnerships can be created by express agreement but also may exist as implied partnerships based on the conduct of the parties. Additionally, there can be different varieties of partnerships, including general partnerships, limited partnerships, or limited liability partnerships. While partnerships can make sense for a lot of businesses, one of their main drawbacks is a lack of personal liability protection for general partners for business debts. In addition, partners can be legally bound by the acts of other partners that occur without their consent or knowledge in many cases.
Partnership disputes are bound to arise and many can be resolved without the intervention of a lawyer or the courts. Sometimes, however, the assistance of an experienced attorney can help avoid a dispute before it arises and, when necessary, ensure that any dispute is resolved in a way most favorable to your position.
𝗪𝗛𝗘𝗡 𝗕𝗨𝗦𝗜𝗡𝗘𝗦𝗦 𝗗𝗜𝗦𝗣𝗨𝗧𝗘𝗦 𝗥𝗘𝗤𝗨𝗜𝗥𝗘 𝗧𝗢 𝗛𝗜𝗥𝗘 𝗔 𝗟𝗔𝗪𝗬𝗘𝗥
Once you choose your legal proceeding you should hire a lawyer. The role of a lawyer will depend on the option you’ve chosen to pursue.
While not necessary, hiring a lawyer for mediation may help. Mediations are not legally binding, which mean no party has to fulfill what was stated at the end. Having a lawyer present and aware of the what is happening may help you in the future. You don’t need a direct lawyer participation in the mediation, nonetheless, a mediation lawyer might be useful before beginning the process to understand all your options.
Again, having a lawyer is not mandatory, but it is highly recommended. Arbitrations are legally binding, therefore, having someone who is a specialist will help you understand the process and guide in the way you want to go.
Hiring a lawyer for litigation should be your first reaction. They will know how to handle your situation and where to take you or your business.
To save on court costs, mediation is always the recommended option first! If you feel that mediation is too light for your situation, then choose accordingly. No matter which legal proceeding you choose you should hire a lawyer, an ounce of prevention is worth a pound of the cure!
If you’re unsure about your issue or business dispute then please book a call with our legal team. We know it can feel very confusing and overwhelming. Often just clearing things up with a legal expert first can make you feel better and help you decide what your next step should be in the dispute process.
𝗦𝗼𝗹𝘃𝗶𝗻𝗴 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗗𝗶𝘀𝗽𝘂𝘁𝗲𝘀
According the CEDR Mediation audit – 10,000 commercial mediations were performed in 2016, an increase of 5%. There is trend to solve disputes as smoothly as possible. Business disputes raise concerns about the cost of litigation, loss of reputation and loss of time and energy.
Here are some tips to help you solve business disputes.
𝗖𝗵𝗼𝗼𝘀𝗲 𝘆𝗼𝘂𝗿 𝗹𝗲𝗴𝗮𝗹 𝗽𝗿𝗼𝗱𝗲𝗲𝗱𝗶𝗻𝗴𝘀
The procedure and results depends on which approach you choose. Before you go with one or the other, look to your dispute resolution clause. Often this clause requires resolving conflict by mediation or binding arbitration. Mediation and arbitration are two different collaborative practices. These alternatives are faster and cheaper than going to court.
In the event you choose mediation, an independent third party helps you to come to a mutually acceptable settlement. The mediator has no authority to make a binding decision, their only duty is to help parties come to a resolution they can agree on.
Mediation is the most popular procedure. Why? It gives you the most control with a better chance to come to an amicable solution. In contrast, once you choose arbitration or litigation, it is up to the judge or the arbitrator to decide and they are empowered to impose a decision.
If you pursue arbitration, an independent third party will consider the facts and make a binding decision. If mediation does not enable you to resolve the dispute and you do not wish to choose arbitration, your last option is:
My advice would be to only take a dispute to court as a last resort. Why? It may result in a leak of important information for public viewing, it is expensive and it is often a very long road.
𝗪𝗵𝗲𝗻 𝗠𝗶𝗴𝗵𝘁 𝗮𝗻 𝗜𝗻𝗱𝗶𝘃𝗶𝗱𝘂𝗮𝗹 𝗼𝗿 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗡𝗲𝗲𝗱 𝗛𝗲𝗹𝗽 𝗙𝗿𝗼𝗺 𝗮 𝗖𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲 𝗟𝗮𝘄𝘆𝗲𝗿?
A corporate lawyer advises firms on how to comply with rules and laws, but that's only the beginning. In truth, any individual starting a business venture could benefit from a corporate lawyer. Why? Because a corporate lawyer can help you structure and plan your business for success, even if you end up going with a business structure other than a corporation.
It's always a good idea to have a lawyer on board to craft your business' managing documents, review contracts, and help you make other strategy decisions.
Of course, it's not always possible for smaller businesses (or even medium-sized businesses) to have a corporate lawyer on retainer, but one should be consulted when forming a business, when closing a business, and when problems arise, at the very least.
Consider meeting with a corporate lawyer in your area if you are starting a business venture or need advice on anything else related to business transactions or planning.
𝗪𝗵𝗮𝘁 𝗦𝗸𝗶𝗹𝗹𝘀 𝗗𝗼 𝗖𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲 𝗟𝗮𝘄𝘆𝗲𝗿𝘀 𝗡𝗲𝗲𝗱?
Corporate lawyers should have excellent writing, communication, and negotiating skills because these skills are relied upon so heavily in day-to-day corporate law work.
Because corporate law is a diverse practice area that touches on many different transnational, regulatory, and business-related matters, it's important for a corporate lawyer to have the desire to learn about many different areas of law, unless they want to specialize in one niche area such as securities law.
Additionally, many corporate lawyers have multiple clients in different industries, which means they must be willing to learn the ins and outs of those unique industries.
Finally, corporate lawyers need the skills and wherewithal to reach out to other lawyers when they reach a specialized topic that they don't have experience with such as tax, ERISA, employment, or real estate.
Yoel “Mo” Molina, I am a lifelong resident of Miami, Fl. I am a graduate of Miami Senior High, Class of 1992, Georgia Institute of Technology, B.S. 1997 and University of Maine School of Law, J.D. 2001. I have been practicing law in Miami Since 2001. I am a former training prosecutor in the Miami-Dade State Attorney’s Office. I have experience in jury trials, appeals, and administrative hearings. I have appeared before judges across the State. My experience ranges from civil litigation matters, collection matters, foreclosure, business and corporate, contracts, real estate, leases and employment matters..
"Mr. Molina has always been there for us with timely, reliable and competent advice. He is an important and valuable part of our team." Corporate Client Eric Delgado, President of American International Export, Inc., a worldwide importer and exporter of brand name appliance parts.
"Yoel has been responsive and attentive to our company’s best interests and needs. He has been a valuable resource to our company. Any company that enlists his services would be in good hands-- including our own clients.” Corporate Client Gibran Flynn - Co-Owner and Founder of Eleva Solutions, Inc., the South Florida leader of outsourced HR, Staffing, Training, and Loss Prevention.
"My name is Anastasia Yecke Gude and I am the owner of Healing Hands Therapeutic Massage LLC. In the process of my company’s growth and expansion, I suddenly found myself a few weeks ago in need of a 1099 contractor agreement, and I needed it ASAP. As in, the very next day! I contacted the Law Office of Yoel Molina and his assistant put me in touch with Mo. I sent him what I had drafted up and he replied within a few hours with suggested revisions and clarifications, as well as a few insights I had not even considered. I was thoroughly impressed by the quality of work he provided, especially considering the time crunch I put him in (sorry, Mo!). I definitely recommend his services to anyone in need of a good contract attorney, and I will be calling him again for future work…hopefully in less of a rush next time!"