Business Law
FAQs
Subject: Agreement
Question: Hello, I am a 23.5% partner in a California
Corporation. I recently decided to sell 22% to a friend of mine. The
agreement reads that I forward him those shares and he has a
deadline of 9/10/2006 to pay me in full for those shares. If he does
not pay me in full by that deadline, any unpaid for shares will
revert back to me. I am charging him a total of $7,000.00. He has
paid $2000.00 so far. I wrote the agreement and emailed him a copy.
We both signed our own copies and faxed them to a 3rd partner. There
is not a copy that exists has both our signatures on it. How binding
is this contract? Do I have any legal options regarding stoping it
at this time before I reeive another payment from him? Thank
You.
Answer: First, you should have consulted with an
attorney. If the corporation has an S election, the new shareholder
needs to sign a new election. Frankly, you should have a stock
pledge agreement as security.
It sounds like your agreement
should be binding because each party has the other's
signature.
I hope this
helps!
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Subject: partnership
proposal
Question: Dear.Mr
Ronald
Ronald, I will like your input on negotiating. I own a
successful small business and i have been able to grow it to where
it is today with great input from a cordial friend whom we have been
working together close to a year now. he has no financial input in
the business but he has contributed profoundly into the business
intellectually giving the company management input to develop
all the necessary corporate infrastructure the business need to
thrive. now he want to reaffirm his commitment to the business. He
has propose to take up a 25% stake in the business subject to an
agreed valuation and a position of Executive Director on the Board
with a token package this will enable him also to share in the
success of the business. what is fair? he has no monetary equity but
can give valuable intellectual capital. what percentage should i
negotiate it to that will be a fair
deal
Answer: You certainly should find a way
to fairly compensate someone who has been instrumental in growing
your business. Nevertheless, you should be very cautious about
giving away ownership in the business. If the relationship cools, or
if your friend becomes sick or dies, you will have to worry about a
potentially adversarial minority stakeholder. Therefore, if you want
to compensate this friend, I suggest that you have your attorney
prepare a "phantom" stock agreement. The way these type of
agreements can work is to tie in the payment to the profit of the
company. For example, while this friend is employed by the company
he would be entitled to x% of the annual profit and if the company
is sold, y% of the proceeds. This could be an annual contract. If he
quits or the arrangement is terminated, his rights to future
compensation ceases.
I hope this idea helps you!
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Question:
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Category:
Business Law
Location: NJ
Subject: Legal issues with
pornagraphic industry in nj
I am attempting to open an online
buisness in adult entertainment. I want to know any forms i
might need, things I would need to fill out etc. I know that
it is a sensative issue and Im not sure If it is even legal in
NJ. I am trying to be fully legal with no questionable aspects
of this buissness. What forms must actors fill out? Forms with
state or county? Legal disclaimers? Basically I am very concerned
about breaking the law and risk of a law suit. Please let me
know. THank you very
much.
-Joe
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Reply:
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Category: Business Law
Location:
NJ
Subject: Re: Legal issues with pornagraphic industry in
nj
First, you should consider NOT locating in NJ. Because of
Gov. Corzine's Sales Tax law changes, Information Services are now
subject to NJ Sales and Use Tax. There are very few guidelines on
what is included as an Information Service, but there is no reason
to take the risk.
You will need to establish a Limited
Liability Company to protect your personal assets. You will also
need contracts with the performers and models and agreements with
end users.
Frankly, there are no "magic forms." Rather, you
need representation to fit the specific needs of your
business.
I have more infromation about setting up businesses
at www.taxesq.com
I hope this helps!
Ron
Cappuccio
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