Partnership Agreements and LLCs

A partnership agreement or otherwise known as a shareholder agreement, an LLC Operating Agreement, or any other written contract between business partners are critical. The most likely business dispute is a business partnership dispute. Often times, each partner's personal assets are exposed in a partnership or business dispute to the surprise of each partner.

A well-written partnership agreement should answer the following questions:
--What happens if one partner wants to be bought out?
--What happens if one partner becomes divorced or disabled?
--What is each business partner's duties?
--If a disability or death occurs, how is the other side bought out?
--What is the purchase price upon a buy out?
--What is the procedure for making key business decisions?

The above questions are critical questions that a well-written partnership agreement should address. Sean Robertson is a business and asset protection attorney based in downtown Chicago and Naperville, Illinois. Sean Robertson is Managing Partner of Robertson Law Group, LLC. Sean Robertson can be reached at either (312) 498-6080 or (630) 364-2318.

Non-disclosure agreement

What is a non-disclosure agreement? A non-disclosure agreement or otherwise known as a "NDA" is a legal agreement that protects an employer's important asset such as priviliged information. Privileged information could be an asset such as methods of getting business, processes, certain business or trade secrets to name a few items.

The purpose of a Non-Disclosure Agreement is to protect the employer's assets and discourage the employee(s) from competing against the employer by using the employer's information against the employer. For example, assume that John Smith owns a furniture store and John hires Jack Johnson as a salesperson and manager of his furniture store. John Smith has Jack Johnson sign a non-disclosure agreement stating that Jack will not use the confidential information inquired during his employer to compete against John Smith in the furniture business.

The key to a non-disclosure agreement is keeping it limited in scope and maintaining the threat of potential litigation if the employee breaches the non-disclosure agreement.

Sean Robertson is a business and asset protection attorney based in downtown Chicago and Naperville, Illinois. Sean Robertson can be reached at (312) 498-6080 or (630) 364-2318.

Why Entrepreneurship is Fun?

Entrepeneurship and self-employment is fun, but it is filled with liability risks unlike employment with somebody. Many entrepreneurs dream about owning their own business and building this profitable company. Often times, entrepreneurs fail to understand the capital requirements and liability risks associated with business ownership.

One of the first decisions an entreprenuer must decide is what business entity to incorporate as. Being a sole properietor or partnership in your personal name is unwise and presents a bad business image to a budding entrepreneur or start up company. It is important to consult a business attorney to discuss your business structure and what liability risks that are inherit with being an entrepreneur.

Many business attorneys and general attorneys do not understand asset protection because they have little experience. Sean Robertson has a lot of experience in asset protection because he faces lawsuits for his clients on a daily basis. Unfortunately, asset and business structure takes on a new importance when you are the Defendant or potential Defendant in a litigation matter that threatens your solvency or financial stability.

Sean Robertson is a business and asset protection attorney in downtown Chicago and Naperville, Illinois. Sean Robertson can be reached at (312) 498-6080 or (630) 364-2318.

LLCs and Corporations for Small Business

Many small business owners wonder what are the differences between LLCs and Corporations for small business owners. In this blog, we will discuss three main differences between LLCs and Corporations.

The first main difference is the LLC offers a lot more flexibility than a S corporation. A LLC is a limited liability corporation and is a hybrid between a partnership and a corporation. A LLC is a disregarded entity for tax purposes because partners or individuals pay taxes based upon their own tax situation. Thus, the corporation does not pay taxes but rather individuals file a 1040 return based upon their income, deductions, and losses if any. In contrasts, an S corporation is also a pass through entity, but one distinct difference is treatment of payroll taxes. With an S corporation, a business pays payroll taxes on reasonable salary and not on profitability. With an LLC, business owners pay taxes on the profits of the corporation whether they took a distribution or not.,

The second difference is flexibility. An LLC is flexible and has different types of ownership interest. An S corporation only has one type of ownership interest. Thus, an S corporation does not have the ability to give an investor preferential rights upon liquidation of the business like an LLC. For example, a LLC can offer non-voting and voting shares to shareholders/partners. Often times, accounting and law firms will have different classifications of partners or members. Basically, this different classification is equity and non-equity partners.

The third difference is costs. An LLC is generally more expensive to operate in terms of initial and annual operating costs. In Illinois, an LLC costs $500 to incorporate where as a corporation costs $175. An LLC also has $250 to $400 in annual reports costs compared to $125 to $200 for a Corporation. In my opinion, most small business owners benefit from the S corporation unless they are entreprenerial and expect to offer partnership and ownership opportunities to key employees. Then, the LLC generally is a much more beneficial business entity because of its' flexibility.

Sean Robertson is a business and asset protection attorney that concentrates in small to medium sized business law. Sean can be reached at (312) 498-6080 or Sean@RobertsonLawGroup.com. Sean is a entrepreneur and loves representing fellow small business owners and entrepreneurs.

Corporate Structure for Start Up Companies

Corporate structure is critical for successful growth. Ofen times, start up companies ignore or under appreciate the importance of proper growth structure and how the choice of an LLC or Corporation are critical for their growth purposes.

Start up companies that intend for key employees to be their shareholders/partners in the future should be careful. An improper decision can lead to litigation risks and hurt the growth of your company. One bad decision can ruin your company. The costs of litigation are difficult to estimate and often times, litigation will quickly kill your cash flow.

There are real differences between and LLC and Corporation. I will speak about the differences between an LLC and a Corporation at a later date.

Sean Robertson is an corporate and asset protection attorney based in downtown Chicago. He can be reached at (312) 498-6080 or Sean@RobertsonLawGroup.com.

Basic Business Contracts

There are basic business contracts, which all business owners should strongly consider such as employment agreements, independent contractor agreements, consulting agreements, and vendor agreements.

There are basic provisions that should occur in these agreements. The first provision is a choice of jurisdiction. The choice of jurisdiction is the State or County where one must file lawsuit if a lawsuit will be filed. The second provision is no oral modification without the consent of all parties. The third provision is whether reasonable attorney's fees should be awarded when there is a breach of the contract. This is a big deal because this gives the non-breaching party the ability to get their attorney's fees and costs reimbursed in case of a dispute. The fourth provision is a severability clause. A severability clause is a clause that means that if one provision is found invalid, than the remaining contract is still valid.

Sean Robertson is a corporate, asset protection, and commercial litigation attorney with expertise in representing small to medium sized business owners. Sean Robertson can be reached at (630) 364-2318 or (312) 498-6080 or Sean@RobertsonLawGroup.com.

Setting Up Your Entity and Corporate Structure

In today's economy, the choice of corporate or entity structure is a crucial decision although most business owners fail to understand the importance of their corporate or business structure. The appropriate business or corporate structure is vital for several reasons. The first reason is liability protection. Unfortunately, most business owners fail to properly structure their ownership of their corporation or LLC. For example, John Smith owns ABC Trucking, LLC and is a member of his LLC in his personal name along with another business partner, Jack Johnson. First, John Smith should not in many instances because a member of his LLC in his personal name. The first risk is liability exposure from items such as unpaid payroll taxes, business and vendor disputes, and other creditor concerns. Obviously, most small business owners do not foresee having creditor issues. In this econonmy, small business owners are filing bankruptcy because of their lack of proper corporate structure. Incorporating your membership interest of an LLC is a better way to structure your business interest. The business purpose is to alleviate liability concerns in case you must file bankruptcy. Often times, a creditor will sue your business and you in your personal name. The second reason is growth purposes. An LLC versus a Corporation offers one the opportunity to utilize the flexibility of an LLC, which is critical if you want to add key employees or possibly business owners. In essence, the LLC is a much more flexibile business entity and offers more liability protection.

Sean Robertson is managing Partner of Robertson Law Group, LLC, which is a asset protection, litigation, and corporate law firm. Sean Robertson can be reached at either (312) 498-6080 or (630) 364-2318. Robertson Law Group, LLC has a downtown Chicago and Naperville location. Robertson Law Group, LLC services Cook, Dupage, Will, Kane, and Kendall Counties.

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