Incentive stock options (“ISO”) are corporate benefits that are part of an employee’s contractual benefits package. These benefits allow the employee to buy shares of the company's stock at a discounted price with the extra benefit of possible tax breaks on the profit earned on the stock. Generally, companies typically give ISOs to top-level management, like CEOs or CFOs, or highly valued employees as a type of passive income instead of a higher salary. They are a heavily negotiated term in the employee contracts and are used to persuade sought-after talent to join corporations due to the hefty profits they can yield. The hefty profits stem from the fact that profits made from qualified ISOs are taxed at the lower capital gains rate as opposed to the higher rate for ordinary income.
Waterfall provisions, also known as waterfalls, allow LLC members to decide how to allocate distributions among investors. While many members usually create an operating agreement that allocates distributions in proportion to the amount of investment an investor made, there are other ways a company can make distributions.
Business growth frequently requires capital, but not all forms of capital are created equally. Many businesses seek financing to secure funding, and the corporate finance industry offers a plethora of options. The Small Business Association reported that in 2019, small businesses in the United States had a combined outstanding debt of $644.5 billion. For larger companies in the United States, corporate debt surpassed $10 trillion in 2020. While it is often necessary to raise funds for business growth, it is also vitally important for businesses to ensure that they choose the best forms of financing for their particular circumstances. Mezzanine financing is a unique option for accessing capital. While mezzanine loans can create some financial advantages for businesses, they also carry some potential drawbacks. If you are considering whether mezzanine financing is right for your situation, consider speaking with a knowledgeable attorney at Newburn Law to learn how we may be able to help you determine the best financing options for your business.
A covenant running with the land is a specific legal agreement that applies a current agreement or arrangement to any future property owners, successors or assigns. Covenants running with the land require specific legal language and can have a dramatic affect on the value of an agreement - particularly in the natural resources context. At Newburn Law we can help you understand the fine print in your covenant and determine if it is constructed to survive.
Mergers and acquisitions (M&A) are complex transactions that involve multiple parties, multiple assets, and complicated agreements. When one company purchases another company or two companies merge, there are expectations on the part of each party concerning the quality of assets being purchased, the success of the future company, and a myriad of other issues.
Every party in a lending or business agreement attempts to secure their position through the legal contract created. In many cases, there are certain control terms that are sought by financing partners in order to ensure that debts are paid and that they have security in the event that it appears a borrower may remain unable to continue to pay a debt. Understanding common control terms in these types of agreements can help ensure that your legal and financial rights remain protected. Consider visiting with an experienced business attorney at Newburn Law, to learn more about your rights specific to your contract or agreement.
If you just formed an LLC, or are looking to do so, contact an experienced Newburn Law attorney today to learn more about what you should include in your operating agreement and what issues you might initially be overlooking.
With the rise of the gig economy and availability of independent contractors, many companies are considering hiring independent contractors rather than employees. However, the question has to be asked – when should a company use independent contractors and when should it use employees?
Developing acquisition criteria is essential for any business considering acquiring another company to increase shareholder value. Once a company determines that an acquisition is the most cost-effective way to increase its value, the key to developing an effective acquisition strategy is determining the acquisition criteria the company will use to evaluate target companies.
A good business partnership is like a marriage. You choose your partner(s) for a reason. Transfer restrictions represent your only defense to ended up with a partner you didn't select. However, transfer restrictions can also limit your ability to sell your interests in the business. Contact an experienced Newburn Law attorney to help you balance these needs and ensure the long-term success of your business.
Indemnification is an important aspect of risk management. Contact our experienced business lawyers at Newburn Law, P.C. to discuss what indemnification is and why you should consider it as a business owner.
All businesses rely on people. Human resource questions impact every business, and while your employees are your most important asset, they can also be one of your biggest risks. At Newburn Law, we understand how important your employees are to your success. We help our clients develop policies and procedures for their employees to not only keep employees happy and engaged but also to minimize the risks that human resources issues can raise. Contact us today to learn more about why you need a company employee handbook.
Any business owner knows investments are critical to starting and expanding your company. At Newburn Law, we support our clients at every step of the way, regardless of their size or industry. One of the most important guiding documents in the investment relationship is the financing term sheet. Consider visiting with our experienced business lawyers to negotiate and review term sheets to ensure your business is getting the investment you need but not signing away too much. If your business is negotiating with investors, contact our experienced transactional lawyers. Whether this is your first term sheet or your hundredth, our lawyers will be there to guide your business through this complicated process.
Many forms of commercial transactions exist, spanning from one-off transactions, such as sales, to ongoing agreements involving investing or receiving investments in a business. They can occur on a large or small scale. They might occur between consumers and companies, between multiple businesses, between government entities and businesses, or even between internal departments within a company. They can involve the exchange of materials, products, services, or intangible property. At Newburn Law, we have experience drafting documents to memorialize all types of commercial transactions.
For small businesses, corporate governance is critical. Not only is it important to ensure smooth business operations, but it is also necessary to ensure fairness to shareholders and integrity among management. Establishing processes and procedures for directors and officers of a business help...
If you are setting up a new business, trust our experienced business lawyers at Newburn Law, P.C. to help you choose the right business entity for your small business.
Businesses—small and large—all face legal, compliance, and regulatory issues. From legal entity formations to day-to-day legal matters to more-specific litigation conflicts, all businesses encounter various legal requirements that require expert guidance. Every business can benefit from having a lawyer's expertise on the team. However, not every business needs to spend the, often high, costs of hiring a full-time in-house attorney to have this guidance.