business | Corporate law

A core principle of Hendricks & Owens legal philosophy is to build a relationship of trust and cooperation with our business clients so they feel confident in the legal work that they are receiving. Everybody has heard a lawyer joke or two that involves attorneys swindling their clients out of money. We want to change how attorneys are looked at and help get rid of this stereotype. Our clients know every bill they receive from us is for services they needed and not just an excuse to exploit their lack of understanding. 

Businesses encounter legal issues every day. At Hendricks & Owens we try to help these businesses stay in front of these issues by taking a proactive approach to business law. For years we have been helping businesses prevent problems, saving them time and money in the long run. It has been our experience that thousands of dollars can be saved if a potential issue can be identified and prevented before it becomes an expensive and cumbersome lawsuit. 

With the preventative approach we give our clients several options. The first and most popular option is the in-house option, and the other option is the a la carte option.


in-house option

The In-House option allows us to get a comprehensive understanding of your company's needs and legal exposure. From there we create a plan with the client to mitigate their potential exposure and cover their ongoing needs.


We start with our legal assessment. This involves a questionnaire and a follow-up meeting. The questionnaire gives us our first look at potential needs. The follow-up meeting allows us to ask questions and allows the client to ask questions. Through this process we ultimately get a better understanding of how our client does business. 

With this understanding we are able to take the information and prepare a proposal that outlines the potential legal needs, the ongoing relationship and what a monthly fee would be to cover those. The proposal covers the work that would need to be done to mitigate the company exposure, which often includes corporate maintenance, contract review, operating agreement reviews, buy-sell agreements and other corporate affairs. We would be acting as in-house counsel. 


The first year of the relationship is usually an extension of the assessment as things come up that were not originally thought to be legal issues. As our clients get more comfortable coming to us with legal questions, they continue to use us more and more and get used to saying, “let me run it by my attorney first” without the cringe of thinking it is going to cost them an arm and a leg to do so. 


After the first year we discuss the future and adjust the fee according to the evaluation of the first year. We have found that once our clients get comfortable using the in-house service, they do not want anything to change and increase their use as the year progresses. As their business grows, their needs grow too, and we are able to make necessary adjustments to make sure their needs are covered. We become part of their decision-making team and an indispensable cog in their business progression. 


All businesses need to have in-house counsel, but they are not aware that the service is available to them at a price they can afford. If you would like to see if this is something that could benefit your business, contact us to schedule a free, no obligation consultation and legal assessment.   


On some occasions we come to situations where the in-house option is not the right fit for a client and they just need a few things here and there. We also have the a la carte options that your typical law firm offers, but with a twist. We want to take the guesswork out of legal needs. We do not want our client to have to come to us and ask us to do something without knowing what it is going to cost them. The  a la carte  option allows clients to choose what services they need, and we provide what the cost will be. There is no guesswork involved. They know the amount before any work is started. 

 

Our full range of a la carte options include: 

business formations, 

by-laws and operating/partnership agreements, 

domestication, and 

general corporate maintenance and compliance. 

 

We can also help with: 

employment and HR matters, 

overtime and unemployment issues, and 

workers compensations. 

commercial real estate matters, 

real estate financing,

commercial contract drafting and review, 

real estate purchase and lease agreements, 

promissory notes and other lending documents, and 

many other transactional needs.

 

As much as we try to be proactive and try to avoid litigation it is sometimes inevitable. Litigation is hard to fit into either the In-House option or the a la Carte option. At Hendricks & Owens we are experienced in corporate litigations and are skilled litigators. We have represented our business clients in a wide range of cases, including monetary arguments, contract disputes, contract enforcement and many more. We like to make sure that our clients know what they are paying for. If we are asked to litigate, we break it down either to monthly payments or flat fees for certain stages of litigation so there are no surprises.  

Business formation is often the first step for entrepreneurs in their start up. Choosing the right entity is crucial. Different entities can have different benefits. Some entities are more suited to secure financing, others to reduce your tax obligations, and some for liability protection. We can help you get a solid business structure in place so that you can provide your organization with the best possible chance of success. Entrepreneurs are not afraid to take risks, but it is never a good idea to take unnecessary risks. Each business incorporation—whether a sole proprietorship, partnership, LLC or even a nonprofit—has its own pros and cons. We can help you wade through the options, so you choose the best entity for your unique opportunity.

 

Types of business entities include:

 

Sole Proprietorship

This is the simplest entity and does not require any formal registrations. It also does not give any liability protection. There are some tax advantages to having a sole proprietorship but nothing that you could not also achieve in other entity choices. A sole proprietorship is usually just a starting point for a business and they often register as an LLC or Corp at some point.

 

Partnership

A partnership is similar to a sole proprietorship in that it does not require any formal registrations. However, there are very complex laws that govern partnerships and how liability, profits and other things are divided between partners. It is essential to have a good partnership agreement in place that deals with all those questions and that govern how the partnership is run. If you do not have a partnership agreement in place, and a dispute arises, you have to rely on the default provisions that legislatures have put into place, and that may not be what is best for your partnership. Over the years there have been entities created that took the partnership platform and tried to add an element of liability protection. Some of those are Limited Partnerships, Limited Liability Partnership as well as others. In each of these there is some form of general partnership liability and they may be the right fit in certain circumstances. However, often there are other entities that can limit liability while still acting as a partnership. 

 

Limited Liability Company

In comparison to other entity types, Limited Liability Companies (LLC) are the newest form of entity. Laws were first enacted in Wyoming that created this entity in 1977. Since that time every state recognizes some form of LLC registration and nearly two thirds of all new businesses formed are LLCs. The benefit of an LLC is that you have the convenience and simplicity you may get with a sole proprietorship or partnership with the added liability shield they lack. They are “flow through” entities or are considered disregarded entities by the IRS which means there is no corporate taxation, and the income flows through directly to the owners/members. There are also other tax advantages and disadvantages of an LLC., To get a complete understanding of the tax advantages you would want to discuss this matter with an accountant. 

 

The versatility of an LLC also gives you the option of filing a subchapter S election with the IRS to give you the tax advantages that go along with being set up as an S-corp with the underlying structure of the LLC as opposed to a regular C-corp. 

 

The broad range of options available to the LLC are the reason  it has become the most popular entity choice. If your goal is to grow, and grow fast using investor money, then this may be where you would be limited by this entity choice. It is much easier to get investor money by using a C-corp and you are able to sell or give stock in exchange for their investment. If you are planning on growing in this way be sure to talk with an attorney first.

 

 

Corporation

 

A corporation is the most well-known entity as it has been around for the longest time. Most of the larger companies that have been around for many years are corporations, such as Coca Cola, Nike, Apple, etc. If your goal is growth and having different investors, then this is the entity choice you want. You also receive the benefit of a corporate shield from liability. This means that the only amount of money that is at risk, is the amount of money that you have invested in the corporation. There are two main forms of corporations: a C-Corporation, which is the most common and an S-corporation. 

 

C-Corporation (C-Corp)

A C-Corporation is the typical corporation with the “C” designation for tax purposes. If you are a C-Corporation, it means the company and the shareholders are taxed separately. This means the corporation will be taxed on their profits and the shareholders will be taxed on their portion of distributions from those profits. Thus creating double taxation with the corporation getting taxed on income and the shareholder then getting taxed on their portion of that  income. You should always talk to a CPA to make sure this is the right entity choice for tax purposes. There are some deductions that are available to a corporation that may not be available to other entities.

 

S Corporation (S-Corp)

If you are a corporation and you meet certain criteria, then you can apply for a subchapter S election with the IRS. This is where the S-Corp gets its name. If you make this election, then the income becomes “flow through” to the shareholders based on their interest in the company. Meaning, it is not taxed at the corporate level and then again at the shareholder level. The reason not everybody makes this election is because you are limited on who can be a shareholder. It has to be an individual and cannot be another business, etc. Another limitation is on the number of shareholders you can have. In an S-Corp you can only have 100 shareholders and only one class of stock can be issued. This is similar to an LLC but there are some deductions afforded to a corporation that are not available to a typical LLC. An LLC is not precluded from applying for an S election through the IRS, but it then is under the same limitations as a typical S-Corp to ownership of membership interests. 

 

Non-Profit Organization (NPO)

Non-Profit Organizations are organizations or corporations that are set up without the intention of making profit. They can have income and they can have revenue, but that revenue is generated without the intention of generating enough income or revenue to turn a profit. Typically, charitable institutions are NPOs, hospitals are usually NPOs, and relief groups are NPOs. The benefit of setting up a NPO is that you are not taxed on your revenues or income as you are not turning a profit. This is not to say that you cannot have individuals that work for the organizations, or that you cannot raise capital. This can all still be done. However, anything that is brought in through contributions or donations, must be used to fund the charity and nothing is distributed as ownership dividends or payments.

 

In recent years there have been states that have created low profit entities. These entities can have profits if they are very low, but they are also taxed on those profits. These are very niche organizations and you should not set one up without going through all the options with your attorney and accountant. 

After you have your entity designated and before you are doing business, you need to have articles in place on how your entity will function. There are day-to-day operations that need to be defined and there are long term operations that also need to be addressed. These are addressed in either your By-Laws, Operating Agreement or Partnership Agreement. 


By- Laws

If you have chosen to set up a corporation then you will have by-laws. This is the law that governs the function of the business. In this document you designate who the officers and directors of the company will be and how that is to be decided if needed in the future. It will outline the different classes of shares and what voting rights those classes of shares will have. It discusses when annual meetings will be held, how additional meetings can be called, and the process by which to call a special meeting. It is the law that governs how the entity will function. You want to have detailed by-laws in place so there are no questions as to what is to be done in certain, common situations.


Operating Agreement 

Operating agreements and partnership agreements are similar to by-laws, but they are for LLCs and for standard partnerships. If you have chosen an LLC, the IRS will either treat you as a disregarded entity (single member) or a partnership. This means the income can flow through to the partners. This designation must be done within the articles of organization and then in further detail in the operating agreement/partnership agreement. The Operating Agreement addresses dissolution, withdrawal of a partner, distributions to members/partners, payments to members/partners, designation of who can or cannot be a member, what members/partners can or cannot vote, and many other relevant issues. If you are not set up as an LLC but are still a partnership, then your partnership agreement will address many of the same issues. 

This is the process of taking a foreign entity (either out of country or from another state) and making it a local company. If you have changed your business headquarters, then it makes sense, in most situations, to domesticate your business to that new location. Even if there are advantages to keeping your main business registration in the original state, you will still need to register in the new state as a foreign entity in order to be given authority to do business in that new state.  

Corporations, LLCs, and other entities that limit liability are required to do certain things to maintain their corporate shield or liability protections. This is commonly known as corporate maintenance and compliance. There are many companies out there that do not pay attention to corporate maintenance and let it fall by the wayside only to find out later that they no longer enjoy the protection of their corporate shield. Entities need to abide by their by-laws/operating agreements/partnership agreements in order to maintain this protection, as well as to keep their business separate from their personal affairs. There are also certain meeting requirements which additionally require minutes to be kept. These are all the little things that don’t seem like they are important, but when you are sued those are the first things that judges are looking for to see if the business is legitimate or just a sham set up to try to avoid liability. 

There are many issues that relate to employment and Human Resources. Some of the issues that relate to this area are to consider whether to have employees at all, or if you just need independent contractors? If you do have employees, do you want to have them under contract or at will? If you do need to let someone go, do they have any recourse against you? If you had to terminate employment for cause, can the employee still collect unemployment? Are you required to pay overtime to your employees, and are salaried employees at least getting minimum wage? These questions and many others are important questions that are different for each situation and need to be addressed with your attorney. We have helped many of our clients with these questions and would be more than happy to discuss them with your company. 

Workers Compensation was created as a way to help resolve issues between employers and employees when there is a workplace injury. If an employee is injured at work, workers      compensation insurance steps in to help pay for the injuries so the employee cannot sue the employer directly for the injuries. There are certain things that need to be done for workers compensation to pay for an injury, and as with anything else there are employees that try to exploit the system. An issue that not many employers are aware of is that if you have employees in different states, then you may have to have several workers compensation policies in place      as this is a state-run insurance and coverage may not extend into another state. 

Whether you are a developer or looking to invest in office space there are many hurdles that you need to jump through to ensure that you are doing all that you need to in order to be successful. For developers there are zoning issues, variance requests and planning and zoning requirements that all have to be addressed before you can start your project. If you are an investor looking for some corporate real estate to invest in, you need to know what you are getting into and the legal requirements that you are about to face. We have experience in many different commercial real estate situations and can be there every step of the way to ensure you are not opening yourself up to unintended headaches or liability.  

Whether you are purchasing a new property that is seller financed, or you are the financer for property, you need to make sure that the right documents are in place so both parties are protected. If a Deed of Trust is being used there are only certain individuals that can act as the trustee. An attorney can act as trustee in this situation and that is one of the services we offer. In the unfortunate event that the buyer defaults we can help you through the foreclosure process and hold the foreclosure sale of the property. 

In a world that has become more and more litigious over the years, a well drafted contract can be the difference in years of litigation or a quick resolution. Unfortunately, a person can sue anyone for anything in the United States. However, once the suit starts, a well drafted document can make all the difference. A well drafted agreement can also help avoid confusion as to expectations of the parties. An agreement that clearly defines terms and expectations can help avoid conflict before it starts. 


We not only draft commercial agreements, but we can also review those agreements to ensure that you are not going to be getting taken advantage of by the other party. Typically, the first draft of a document drafted by the opposing party, is very one sided and protects their interest while you are left to get trampled on. There are minor changes that can make a world of difference to ensure that both sides are treated fairly should there be a dispute. 

If you are looking to purchase a home or a rental property and have the cash to do so you may be able to save some money by avoiding real estate agents. If you are able to avoid using real estate agents, you will need an attorney to help draft up the real estate purchase agreement. If it is a rental you will want to have a good lease agreement in place to help protect your newly acquired asset. We can help you from start to finish and make sure you are set up for success. You may be tempted just to download one of the many agreements out there online but often those are boilerplate and are not tailored to your situation. It is always better to have an attorney help you with these documents just so you are protected from the unforeseen. 

There are many situations when you are lending money, borrowing money, or purchasing something on credit and you will need an agreement as to the terms of the transaction. Whether you are selling your business to a current employee and they are going to be paying overtime or you are getting a loan from a family member you will want to have a document that clearly defines the terms and sets expectations of the relationship going forward. We have helped many clients create unique agreements to fit a peculiar situation that they would never be able to find a boilerplate agreement online that would cover it. 

Our Mission

Our goal is simple, it is to help your growing business with legal needs you may have while taking the time to educate you along the way. Whether you are starting a small business or you run a large corporation, we will be there to answer your questions.