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Hackensack Business & Commercial Law Blog

Understanding remedies for ousting an owner

Shareholders and investors in New Jersey may benefit from learning more about the different ways that an executive, owner, operator or partner may be ousted from an organization. Regardless of the organizational structure, the most effective means for resolving partner disputes may be by participating in direct negotiations. When partners are unable to reach an amicable resolution, an objective third party may be able to assist the disputing partners.

In some cases, organizations prefer to rely on mediation, non-binding arbitration or binding arbitration headed by qualified professionals. These alternative means to dispute resolution are often preferred because they have helped many organizations save money and time. This strategy may also help organizations minimize the tension or contentiousness that is often associated and exasperated with partner disputes. If resolutions for disputes have not been established in a written agreement already, the only remedy for owner, partner or shareholder disputes may be to dissolve the organization and start over.

Breach of sales contracts in New Jersey

Most businesses are aware that disputes often arise as a matter of course when engaging in business with others. Some of these disputes arise from allegations of breaching provisions of a sales contract. As a sales contract is a legal document, breaches of it can lead to some potentially severe consequences.

A sales contract is formed when one party agrees to provide a specified item in certain amounts by a given date, and the buyer agrees to pay money to the seller in return. When either party violates the contract in a manner so severe that the contract is effectively broken, the injured business may sue the other, seeking consequential damages and restitution to make them whole.

Selecting the appropriate business structure in New Jersey

When people are starting a business in New Jersey, one of the first steps they should take is determining which type of business structure they will use. Understanding the different types of structures and choosing wisely may require an understanding of the different ways that the structures are taxed, and certain regulations apply to some formations but not to others.

For single-owner businesses, many people choose to structure the business as a sole proprietorship as this structure allows individuals to report the business income and losses on their personal income tax return. While the structure offers the benefit of simplicity, a major disadvantage with it is that the individual is personally responsible for the business's liabilities. S Corporations are attractive to many small business owners as they afford protection from liability to the shareholders while allowing the income and losses to pass through to the shareholders' individual returns. Disadvantages include the necessity of holding shareholder meetings, higher tax and legal set up costs and the need to file articles of incorporation.

What is an LLC and what are its advantages and disadvantages?

There are several advantages and disadvantages to choosing a limited liability company for a business's chosen structure in New Jersey. This entity type, a hybrid structure that blends the limited liability features of a corporation with the operational flexibility and tax features of a partnership, is popular in the state for small businesses.

The LLC structural advantages include the limited liability features, inexpensive set-up, fewer required records and profit-sharing features. Limited liability means that the individual's personal assets are protected from the indebtedness or liabilities of the company. The business structure is generally less expensive to start and has significantly fewer record-keeping requirements than do structures such as an S-corporation. When there is more than one owner of an LLC, the profits can be shared as the owners see fit, so if one person contributes more time or energy, he or she may be provided with a correspondingly higher share of the profits to compensate for that.

Limiting legal action against New Jersey businesses

In today's world, defending against lawsuits may be a routine cost of doing business. People today are quite litigious and many readily sue businesses for a number of reasons. Even if a lawsuit that is filed against a business ultimately fails, the business will still have incurred expenses and spent time defending against allegations, and these expenses can be difficult to handle for a small business. There are preventative measures businesses may be able to take in order to lessen the chance that a lawsuit will be filed against them.

First, all agreements should be in writing. When a written contract exists, the details are easier to enforce. In addition, in some states, some agreements are not enforceable if they are not made in writing. In addition, written agreements should include clauses that specifically outline how any disputes that may arise will be handled. Having a written agreement that a dispute may be resolved through arbitration or mediation prior to any litigation may help prevent expenses associated with court intervention.

Are there different types of mergers?

In some cases, it may be beneficial for two companies to combine their resources. There are many advantages to combining successful enterprises and building a larger company. New Jersey entrepreneurs with an interest in business startup or acquisition may wish to review the different ways that companies can be combined into new enterprises.

The five major types of business mergers are conglomerate, horizontal, vertical, market extension and product extension. A conglomerate is formed when two utterly unrelated businesses are combined. Pure conglomerates have no similarities between the merging corporations but mixed conglomerates occur when the firms want to extend their markets or product lines. Horizontal mergers combine corporations in the same industry, creating a larger business with more market share and opportunities. Vertical mergers combine corporations along the supply chain, merging companies that produce different parts or different stages of the same finished product. They provide for more efficient production of the product and give the benefits of synergy to management and product development.

Selling a business requires thorough preparation

Authorities state that comprehensive planning is essential to successfully selling a business in New Jersey. The process needs to involve an honest and thorough assessment of the business, the marketplace and the desired outcome. In most situations, it is prudent for prospective sellers to retain advisors and legal counsel, who may help plan the sale and ensure that it transpires in a favorable manner, without incident.

According to authorities, pre-sale priorities ought to include a complete business valuation and market assessment. Investigating records of recent and similar business transfers may provide data for which a close estimate of value can be extrapolated. This is critical knowledge to possess when establishing an asking price, authorities say. For, disparities between a business' true market value and its asking price may forestall the sale and inspire doubts about the business as well as the seller.

14 million Dish customers lose access to 7 channels

14 million customers of Dish, including residents of New Jersey, recently lost access to seven channels offered through Turner Broadcasting after contract negotiations between the two companies failed. Popular programming including CNN, CNN en Espanol, truTV, Headline News, Cartoon Network, Boomerang and Turner Classic Movies were all yanked from Dish's lineup following the companies' failure to reach an agreement, according to reports on Oct. 20.

Dish responded by putting MSNBC news programming in their lineup instead of CNN and Headline News, while replacing Turner Classic Movies with FXM Retro. The companies each blamed one another for the channel blackout, with Dish blaming Turner by stating they failed to make a reasonable offer, and Turner blaming Dish by saying they had made numerous concessions. There is no word on whether they will reach an agreement at some point, but for now, Dish's customers will have to go without the seven missing channels.

Things to consider before beginning a business relationship

Entrepreneurs in New Jersey often have occasion to consider taking on a partner at some point during the life of a business. Partnership discussions may occur at the outset of the venture, but they are just as common later. In any case, business owners and prospective business owners must consider many of the same things when joining forces with another person.

It may seem counterintuitive, but it is important to consider exit strategy even before the relationship begins. Because of the zeal and lofty expectations with which many approach partnerships, this can be akin to considering divorce on the wedding day, but a business relationship is likely to end somewhere down the line. A quality exit strategy should cover as many eventualities as the individuals can imagine, but the big points are division of assets and what will happen in the event that a partner dies.

Statute of limitations in contracts for the sale of goods

Under the Uniform Commercial Code, as adopted by New Jersey, any party claiming a breach of a contract for the sale of goods has four years to pursue a legal claim from the time that the breach occurred. The parties to the contract can agree to reduce the statute of limitations to as little as one year. However, the statute of limitations may not be extended beyond four years, even if the parties so agree.

The statute of limitations begins from the time the breach occurred even if the breached party doesn't know about the breach until a later date. An exception to the rule is if there is a breach of warranty and time must pass before any such breach can occur. Furthermore, if an action is taken within the statute of limitations and is terminated, another action may be taken after the time limit expires.

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