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Hackensack Business & Commercial Law Blog

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.

Are there penalties for not dissolving a corporation?

When the owners of a New Jersey business decide to move in a different direction and close the doors of their corporation, it is not enough to simply stop offering goods or services. The owners must go through the formal, legal steps of dissolving the corporation. Otherwise, the corporation will still owe the minimum tax of $500 annually, even if it did not turn any profit or engage in any business activities

Every corporation that is subject to the New Jersey Corporation Business Tax Act is required to pay this minimum tax. The corporation must be dissolved through the Division of Revenue of the New Jersey State Treasurer. The effective date for the dissolution will be the date of receipt by the division of a properly completed and executed articles of dissolution, the final payment of all fees, and the notice of Tax Clearance from the Division of Taxation.

New Jersey company maintains venue in contract dispute

Choices of venue and requirements for arbitration are often spelled out in contracts between international business partners. A recent breach of contract dispute involving a New Jersey sales agent for Croatia Airlines that is making its way through the courts is showing that contractual language may be overridden by other concerns. The dispute between Networld Communications Corp. and the airline stems from an abrupt contract termination by the airline. A provision of the agreement requires that any conflict between the parties be resolved in the Croatian courts.

The plaintiff argued that the case should be adjudicated in New Jersey. One of the company's reasons for the request is that the Croatian government has a controlling interest in the publicly-traded airline. It was also argued that Croatian courts lack the authority to enforce subpoenas for documents, and backlogs in the Croatian courts mean the case could drag out for a decade. Though ruling in the plaintiff's favor, the judge found most of the arguments unacceptable.

What is needed to defend an eviction lawsuit in court?

When a New Jersey landlord tries to evict a tenant, there are some things that the tenant may do in court to defend against the action. This may involve providing receipts as proof of rent payments or, if rent has not been paid, proof of any allegations against the landlord for which the tenant refused to pay rent. Such a reason might involve the landlord not making necessary repairs to the property.

The tenant should consider presenting witness testimony in court. The witnesses would have to appear in court to provide such testimony, as written statements are not allowed. Any written notices either to or from the landlord could be used as evidence, as could photographs of property conditions and other relevant documentation. Even if rent has not been paid because of a valid reason, such as serious infractions on the part of the landlord, the tenant should bring the owed amount in the event the ruling does not go its way.

Registering a business in New Jersey

Entrepreneurs in New Jersey may benefit from learning how to properly register and document a new business in that state. According to the Department of Treasury website, owners of new businesses can complete the process in one to two simple steps. The first step is to record new business entities with the state. The second step involves registering the business for tax and employer purposes. The first step only applies to certain types of business structures, while the second step is required of everyone.

Registering new business entities is required of limited partnerships, limited liability corporations, limited liability partnerships and corporations operating within New Jersey and from out of state as well. Non-profit organizations in New Jersey pay a $75 filing fee, while for-profit businesses and out-of-state non-profits pay $125. . The process can be completed online or the forms can be downloaded.

Appliance giants negotiate deal for North American market

Consumers in New Jersey may be interested to learn that two well-known appliance giants, General Electric and Electrolux, are making moves that could benefit both companies in the future. Electrolux plans to buy the appliance division of GE in order to increase sales in the North American market.

Electrolux, considered a strong appliance brand in the European market, has agreed to pay GE more than $3 billion for its appliance division, which does most of its business in North America. The purchase, according to Electrolux representatives, should help to increase their presence in the continent's appliance sales, a market where they have not shown strength in the recent past. They hope to become a contender against their biggest rival, Whirlpool, by acquiring GE's extensive line of products, which includes stoves, refrigerators, water heaters and air conditioners. The current statistics show that America has about one third of the sales market, while western Europe represents just over a fourth. Data also suggests that the North American market is growing at a much faster rate.

Timing buy-sell agreements

Experts say that the best time for New Jersey business owners to enter into a buy-sell agreement is when things are going good. If a new business is being formed, a buy-sell agreement can be incorporated into the operating agreement of an LLC or the shareholder agreement of a corporation. As long as things are good and the business is profitable, the buy-sell agreement remains in the background. However, when triggering events occur, the agreement kicks in.

Buy-sell agreements are also referred to as business continuation and buyout agreements. They allow owners to specify in advance what procedure will be used to buy out a departing owner. Agreements usually cover such things as who is eligible to buy an owner's share of the business, how a business valuation will be performed and what funding mechanisms will be used.

3 big winners among Google's $23 billion in acquisitions

Entrepreneurs in New Jersey could be interested in this story about the 145 companies that have been purchased by Google in the last ten years to the tune of $23 billion. These facts are from FactSet. According to many financial analysts, only three of those acquisitions are obvious winners.

In 2005, they purchased Android for $50 million, which will be running on 80 percent of all smartphones bought in 2014. According to IDC, they'll also profit from Gmail, Google searches and other apps run on them. Google then purchased YouTube for $1.65 billion in 2006, which may have seemed quite high to some people back then, but the company brought in gross revenues of $5.6 billion in 2013, making it their biggest winner by far. Then, in 2007, they purchased DoubleClick for $3.1 billion, expanding their online advertising scope into the area of display ads.

Pizzeria intends to countersue Turnpike Authority

A Florida company that was sued by the New Jersey Turnpike Authority has notified the agency of its intention to countersue if the issue isn't dropped. The business dispute arose in connection with the pizzeria's logo because of the use of the Garden State Parkway shield in the graphic. The pizzeria opened in 2006, using a variation of its current logo from the beginning.

According to an attorney for the pizzeria, the shield is in the public domain. Additionally, the attorney informed representatives of the agency that their complaint doesn't indicate details about the registration of the logo. The current logo for the pizza restaurant was reportedly registered at the federal level in 2011. Additional points made by the company's lawyer include the fact that it would be difficult for an individual to confuse the two entities because pizza and the New Jersey Turnpike are two very different operations. While logos for both organizations include a map of New Jersey centered in a circle, the wording of the two symbols is significantly different.

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