Law Office of Justin R. Davis, PLLCExperienced Representation For Arizona's Businesses2024-03-12T11:09:27Zhttps://www.justinrdavislaw.com/feed/atom/WordPress/wp-content/uploads/sites/1302050/2020/02/cropped-site-identity-32x32.jpgOn Behalf of Law Offices of Justin R. Davis, PLLChttps://www.justinrdavislaw.com/?p=495292024-03-12T11:09:27Z2024-03-12T11:09:27Zdetailed interplay of financial assessments and negotiations between two or more parties, where due diligence is critical. Contracts will bind the new entity together and outline the terms of the new relationship arrangement.
Within these contracts, every single clause counts. If you miss one detail, you might end up in a situation you did not agree to. Therefore, understanding every word and aspect is crucial, especially in escape clauses. These clauses act like the emergency exits of the agreement. They cannot directly nullify the merger. However, they can allow parties to back out if specific, often unexpected, conditions arise.
A closer look at escape clauses
An escape clause is a contractual provision that explains when and how parties in a contract can withdraw from the contract they signed and agreed to. It acts like a safety net designed to protect the parties against unforeseen circumstances that could make the fulfillment of the contract unreasonable or impossible. Escape clauses can vary widely, and you can customize them depending on the original nature of the contract. Here is how an escape clause typically works:
Activation of the clause: A party can only use an escape clause when certain conditions outlined in the contract occur. The parties must agree to these conditions during the negotiation of the contract.
Notification: Once the conditions for the escape clause occur, the party wishing to use the escape clause should notify the other party. An explanation of the notification process is usually in the contract itself.
Legal process: The party invoking the escape clause must follow the legal process expressly stated in the contract. It might include a period for the other party to address the issue or a negotiation for an amicable separation.
Documentation: The party who wishes to use the escape clause must have proof of why they want to do so. All actions taken should be in accordance with the contract terms to avoid any legal repercussions.
Even though an escape clause will not automatically nullify a merger, it can include complicated language that sets the stage for a material breach of contract. Because either side can use it, you want to make sure you know and understand what you are agreeing to before signing the contract.
A merger is a huge business move. You must protect yourself and your business from unforeseen circumstances.]]>On Behalf of Law Offices of Justin R. Davis, PLLChttps://www.justinrdavislaw.com/?p=495272024-03-07T17:41:56Z2024-03-07T14:56:29Zbeing the first to secure rights for your products, services or brand marks gives a competitive advantage for your business. It is best to know and understand your Intellectual Property (IP) assets and rights in the early parts of your business life.
IPs are creations protected by law, such as product ideas, business signs and names, artwork or music. While these are all intangible by nature, the IP law gives a sense of tangibility to these things by providing their creators the right to control their use. Here are three steps to protecting your business’s intellectual property:
Recognize your IP assets: Note all the unique ideas that build your business. This includes your product ideas, business name, logo and other distinctive signs that set you apart from your competitors.
Secure your IP assets: Different IP rights protect different IP assets. For instance, a patent right protects new technical solutions or inventions. A trademark, trade secret, design protection and copyright all protect different IP assets. Make sure that you secure your products and apply for the correct IP protection.
Register your IP assets: Coordinate with the United States Patent and Trademark Office (USPTO) to register your IP assets.
Registering your IP assets not only protects your products but also allows your business to grow. Having IP rights could attract potential business partners, collaborators and investors. Licensing your IP assets could also be an additional revenue stream for your business.
Addressing IP disputes
Competition is always harsh in the field of business. Your competitors could be around the corner developing similar businesses, products or technical solutions like yours. Businesses often resolve IP disputes through arbitration, mediation or court litigations. Being in an IP dispute could give you a competitive advantage or ultimately bring your business down. Understanding your IP rights can help you safeguard your business’s IP assets and prevent future disputes.]]>On Behalf of Law Offices of Justin R. Davis, PLLChttps://www.justinrdavislaw.com/?p=495262024-02-27T22:14:20Z2024-03-04T22:13:22ZKeeping the business out of an estate
A sole proprietorship is not its own legal entity. Since it is not distinguishable from the owner, the business assets are the personal property of the owner. When the owner dies, the assets become part of the estate of the owner.
In the event the owner had some outstanding debts, the estate executor can liquidate assets from the estate to pay creditors. Even if the debts had nothing to do with the business, the executor may still end up selling the assets of the company to pay off the outstanding amounts.
Passing the business to a willing successor
A buy-sell contract provides for a designated person to become the new owner. Without the buy-sell, the business could go to a family member, such as the spouse or eldest child of the original owner. However, it is possible that the heir has no desire to take over the business and will shut it down.
Even if the relative is willing to continue the company, the original owner might not have trained the new owner to run the business, so the heir lacks the education or the skill to keep up the enterprise. Additionally, the heir may have physical limitations or just does not have the time to operate the business.
Given that a sole proprietorship can easily meet its end if its owner dies, creating a buy-sell agreement can make all the difference in continuing the enterprise going forward.]]>On Behalf of Law Offices of Justin R. Davis, PLLChttps://www.justinrdavislaw.com/?p=495252024-02-21T11:52:16Z2024-02-21T11:52:16ZUnderstand the types of commercial real estate
Commercial real estate investments come in various forms with different purposes. It would be best to know the advantages and disadvantages of each type of investment before deciding which one is right for you.
Research the market and asses the location
Before investing in commercial real estate, it is vital to research the local market. You want to know if the price of your property is fair and how other similar properties in the area are doing. The location of your commercial real estate investment is also critical to its success. A property located in a desirable area with high foot traffic and a strong economy is more likely to appreciate and produce consistent rental income.
Evaluate the property and its history thoroughly
When you find a potential property, scrutinize every detail. Inspect the physical condition of the building, from the roof to the foundation, and everything in between. If the property needs repairs or updates, factor in the cost of these improvements when determining your offer price. Additionally, consider the potential for future renovations to increase the property's value.
Review the property's financial records and conduct a title search. You want to have a clear picture its earning potential and ensure your property is free from legal issues that could affect your ownership rights in the future.
Know your financing options
Understanding your financing options is crucial. Commercial real estate loans differ from residential mortgages in terms, rates and qualifications. Compare the options before choosing the most suitable for your investment goals and financial situation.
Be aware of legal and regulatory requirements
A range of laws and regulatory standards governs investments in commercial real estate. Familiarize yourself with local zoning laws, building codes, and environmental regulations before pushing through with the purchase.
Investing in commercial real estate in Arizona holds great promise but requires due diligence and strategic planning. With the right approach and the appropriate legal protective measures, your investment could be highly profitable and future-proof.]]>On Behalf of Law Offices of Justin R. Davis, PLLChttps://www.justinrdavislaw.com/?p=495232024-02-06T14:30:39Z2024-02-06T14:28:08ZThere are many methods to determine a company's value, most of which involve the following factors:
The company's market value calculated based on its share price
Revenue earned over a specific duration
Past and future profits computed against the actual cash flow of the company
Inflation, which can be a factor when calculating future earnings of the business
Data documented in the company's records, showing equity of shareholders and other details
Value of other assets and liabilities of the business
A company's value can also vary, depending on its nature and the circumstances surrounding its operations. Before hiring someone to appraise a business, it can be helpful to consider if their experience aligns with the company's background.
Keeping the sale legally sound
Aside from getting an accurate valuation, the company's sale can have various complications. Unique circumstances can lead to complex legalities that may impact the purchase's outcome. Sometimes, the issue can be so severe that potential buyers could back out of the purchase and leave the seller hanging.
In these instances, seeking legal counsel can be beneficial, especially when managing the necessary paperwork. Proper guidance can also help secure the interests of all involved parties and address any issues that may arise.]]>On Behalf of Law Offices of Justin R. Davis, PLLChttps://www.justinrdavislaw.com/?p=495222024-02-05T10:32:09Z2024-02-05T10:32:09ZSince this type of property is raw, there are requirements during due diligence you should review as a buyer. These essentials can be crucial to the buying process, including the following:
A disclosure report issued by the state's Department of Real Estate, which can indicate whether the property's sale is lawful or not
A water resources report, potentially showing if the property has sufficient water supply or whether you need to plan for digging a well
Inspection of the land's vicinity, allowing you to determine other issues excluded from its documentation
Schedule of deadlines, helping you define a timeline throughout the purchasing process
When buying undeveloped land, there are strict regulations regarding its associated procedures. As a buyer, you may have a specific date to rescind the purchase from signing the agreement. If you notice anything wrong with the property, you may need to issue a rescission notice before the deadline to make the action valid.
Making rational decisions before finalizing the purchase
Due to its complexity, buying undeveloped land can take significant time and effort. Sometimes, a seller might be vague when communicating the appropriate deadlines for the purchase. Other times, there might be discrepancies with the paperwork, making the purchase legally unsound. Due to its unique qualities, seeking legal counsel for buying this property type can be beneficial. Having valuable legal guidance can help you make reasonable decisions and navigate the process efficiently.]]>On Behalf of Law Offices of Justin R. Davis, PLLChttps://www.justinrdavislaw.com/?p=495212024-01-30T09:46:10Z2024-01-30T09:46:10ZWhen determining IP theft threats, owners should consider risks associated with the nature of the business and its daily activities. Some examples of IP misappropriation and infringement can include diverse methods, including the following:
Illegal distribution of various IP types online or through other transfer methods, such as exchanging CDs, DVDs and other storage devices
Production and sale of counterfeit versions of a business's products or services
Trade secret leaks by someone from the company to external parties, such as competitors and other entities
Unauthorized release of material meant for commercial purposes
For most cases of IP theft, businesses can file civil suits to address valid violations. But sometimes, these offenses can pass as felonies, depending on their details and severity. Additionally, criminal penalties can be necessary to exercise the business's rights to their IPs and deter similar future incidents.
Taking measures against IP theft
IP theft can be challenging to resolve, especially if the offense already happened. These violations can have severe consequences, leading to significant damages. In these instances, prevention is critical to avoiding losses. When planning and implementing practices to protect IP, seeking legal counsel can be helpful. Doing so can help determine the most appropriate legal options to secure the business's IP, considering all relevant risk factors.]]>On Behalf of Law Offices of Justin R. Davis, PLLChttps://www.justinrdavislaw.com/?p=495202024-01-17T15:31:20Z2024-01-17T15:31:20ZTitle issues and defects may also arise before or after closing the sale. These issues can lead to challenging situations, derailing sales or affecting ownership rights years after finalizing the purchase. Title insurance can be helpful during these scenarios because it can cover various costs and losses, including the following:
Undetected liens, overdue taxes and other costs left unpaid by previous owners
Legal defects caused by fraudulent or forged documents, possibly impacting the ownership's validity
Expenses associated with encumbrances, easements and other problems that can affect the property's value
Costs brought about by issues due to paperwork errors during closing
Title insurance can help protect parties involved in the commercial transaction, including lenders and property buyers. Usually, there can be a lot riding on commercial transactions, making it reasonable for lenders to require extensive coverage based on the situation.
Securing commercial transactions
Any commercial real estate transaction can be more complex, putting involved parties in challenging positions if something goes wrong. Unexpected issues can result in severe losses and expenses, depending on how much work is necessary to resolve them.
To address these risks, buyers can seek legal counsel early in the purchase. Doing so can help buyers navigate the process and determine options for protection during and after the transaction.]]>On Behalf of Law Offices of Justin R. Davis, PLLChttps://www.justinrdavislaw.com/?p=495162024-01-09T21:21:16Z2024-01-09T21:21:16ZAre you considering moving your Arizona-based business to another state? Changing your company's domicile or residence, known as domestication, involves a series of legal steps. Before proceeding, you must consider these steps carefully. Doing so ensures a smooth transition and avoids any legal complications or pitfalls.
Understanding the plan of domestication
Domestication is the process of moving your company's official residence to a new state. In Arizona, this process falls under the Arizona Entity Restructuring Act. To change your domicile, you, as the "domesticating entity," must file a Statement of Domestication with the Arizona Corporation Commission (ACC). If your company operates in Arizona and you plan to move to another state, you have to comply with the laws of both states. This also applies if you're moving from another state to Arizona.
Steps to take before a company relocation
To ensure a smooth transition from Arizona to another state, follow these key steps:
Prepare the statement of domestication: List the domesticating entity's name, jurisdiction and type. Plus, you must include the date of original formation in the statement.
Attach required documents: For an Arizona business or an out-of-state entity relocating to Arizona, it's crucial to gather and attach the necessary paperwork.
Determine your filing fee: Fees vary by entity type. So, the amount is $100 for Arizona corporations, $50 for LLCs and variable for foreign entities. Additional fees apply for faster processing.
Submit the statement of domestication: Pair your submission with a cover sheet and all required attachments.
You can submit these documents and the payment by mail or in person at the Arizona Corporation Commission's office in Phoenix. Ensure all mail submissions are complete before sending them to the Commission's office. This will help avoid delays in processing your company's domestication.
Addressing the complexities of a move
Each state has unique rules affecting domestication. For instance, only corporations may domesticate in Arizona and South Carolina, while Nebraska restricts it to insurance companies. Given these complexities, you should consider consulting with a business law attorney. They can help assist you with your business' transition to a new home state.]]>On Behalf of Law Offices of Justin R. Davis, PLLChttps://www.justinrdavislaw.com/?p=495152024-01-05T01:56:39Z2024-01-05T01:56:39ZZoning restrictions
Zoning laws dictate what you can build on your property and its permitted uses. Before purchasing land, thoroughly research current zoning classifications and any restrictions. For example, if you want to build retail shops, land zoned for industrial or residential use will not work. Zoning often limits building height, density and setbacks from property lines. Get written confirmation from local zoning officials that your intended use is permissible.
Access and easements
You will want visibility and convenient access for customers and deliveries. Make sure the property has access to necessary public infrastructure, including roads and utilities. Also, investigate any easements that allow others defined legal access through or over the property. This could impact your future plans. Easements may not be readily visible, so review property surveys and deeds.
Environmental concerns
Contaminated soil, groundwater or hazardous materials onsite will increase cleanup costs dramatically. Even if the contamination happened years ago, the purchaser can be liable for costly remediation. Conduct thorough environmental assessments to rule out problems such as underground storage tanks, asbestos, lead paint or industrial waste.
Being aware of these three potential areas of concern helps commercial real estate buyers avoid expensive surprises down the road. Careful due diligence is key to ensuring the land purchased is suitable for the intended development and use. With the industrial rental industry expected to record at least 5% rent growth in 2024, make sure you consider these details to capitalize on your investment and its potential return.]]>