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Fairfield County business law attorney commercial financing

Whether you are launching a new business or you are interested in expanding your current business, financing your business goals is probably one of your top concerns. Small business owners and entrepreneurs have several different options when it comes to securing funding for a new business venture. Some of these individuals use their own savings, borrow from their home’s equity, withdraw retirement funds, or even use a credit card to finance the business. However, many people find these options to be too risky and instead choose to take out a loan. Conventional bank loans and Small Business Administration (SBA) loans are two popular options to consider when financing your small business.

Conventional Bank Loans

Conventional loans are the most popular type of lending for small businesses. When a borrower obtains a conventional loan, the bank lends him or her a set amount of money at a fixed or floating interest rate. Payment schedules are negotiable and may involve monthly payments, quarterly payments, or annual payments. The parameters of the loan are based on the bank’s particular policies and the business’s overall credit risk. Typically, the higher a business’s perceived risk, the higher the interest rate. Conventional loans are highly dependent on personal and business credit scores. Young business owners with less credit history may not qualify for a traditional loan.

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Norwalk commercial and business law attorney

Did you know that the average U.S. small business owner is 60 years old? If you are like many business owners, you are nearing retirement age and starting to think about your future. You may be thinking about selling your business sooner rather than later because you have concerns about the effects of COVID-19 or because you simply do not want to continue investing so much time and energy into the business. Whatever your reason, choosing to sell your business and retire is a major decision. It is important to define clear objectives, properly prepare for the sale, and take steps to avoid mistakes that could delay your retirement.   

Preparing Your Business for Sale

As the old saying goes, failing to prepare is preparing to fail. Although you may be eager to sell your business so that you can pursue your retirement dreams, it is important not to rush this important transition. One of the most essential steps you will need to take is to secure an accurate business valuation. Properly valuing your business may be complicated – especially if the business’s revenue is down because of COVID lockdowns. A qualified business valuation professional will help you determine how to put an appropriate price on the business. You have probably poured a tremendous amount of your time and energy into growing your business. You deserve to get the best price possible.

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Greenwich commercial and business law attorney

One of the most important decisions you will ever make as a new business owner is choosing a business entity or business structure. Although making this decision may not be as enjoyable as choosing a business name or making decisions about products and services, it is an absolutely crucial aspect of starting a new business. Many new business owners find themselves in deep legal and financial trouble after choosing a business structure that does not fit their ambitions and needs. This is why it is essential to make an educated decision when choosing how to structure your business.  

Types of Business Structures

The type of business structure you choose will have a major impact on how the Internal Revenue Service (IRS) taxes your business revenue. Your business structure will also determine your level of personal liability for business losses. The most common types of business structures include:

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Darien commercial and business law attorney

Business ownership comes with many privileges. As a business owner, you become your “own boss” and get to decide how your business is run. Deciding to buy a business, however, is not a decision to take lightly. New business owners who are unprepared or who do not have dependable legal guidance can fall into major financial and legal pitfalls. If you are considering purchasing a company, you may be wondering whether you should buy a franchise location of an existing business or a standalone business. The answer to this complicated question will depend upon several factors. That is why it is crucial to hire a knowledgeable business attorney to guide you through this important endeavor.

Consider the Differences Between Standalone Businesses and Franchises

The biggest difference between a franchise and independent business is the amount of control and authority the owner has over his or her business. If you buy a franchise, you will likely have a great deal of control over day-to-day aspects of your business, but you may have little input on “big picture” concerns. The franchisor will likely decide the types of products and services the business offers, the business hours of operation, pricing, marketing strategies, and more.

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Greenwich commercial and business law attorney

If you are in the process of becoming a business owner, you may have an overwhelming number of tasks ahead of you. You will need to decide on a business structure, choose whether or not to share ownership with business partners, develop a business plan, and much more. One matter that you may also be considering is whether or not to hire a business lawyer. If you are like most entrepreneurs, you are probably looking to reduce costs wherever possible. You may assume that a business lawyer is only necessary if you are being sued or have other urgent legal matters. However, retaining an experienced legal representative from the very beginning of your journey into business ownership may help you save a significant amount of time, money, and frustration.

A Poorly Written Contract Can Be Disastrous for Your Company

An entrepreneur’s skill set and that of an attorney are often vastly different. Entrepreneurs and business owners are often creative, abstract thinkers who look at the “big picture” instead of focusing on small details. Lawyers, on the other hand, are trained to scour business contracts and other important documents for even the tiniest mistakes that could cause problems for their clients. Having a lawyer assist you in drafting or reviewing contracts such as purchase agreements, nondisclosure agreements, employment contracts, non-compete agreements, and commercial property leases can ensure that you uncover and address any issues that could present problems for your business in the future. Your attorney will ensure that these contracts are accurate, free of ambiguity or errors, and accomplish the task intended. A poorly written business contract can result in breach of contract claims, employment disputes, and a host of other legal issues.

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Stamford, CT commercial and business law attorney

Deciding to sell your business is not an easy decision to make, since it has likely been integral to your livelihood. You have probably put a tremendous amount of your own money, time, and energy into growing your business, and parting with it may be challenging. When selling a business, whether big or small, it is essential that you avoid mistakes that can reduce the profit you obtain from the sale and cause major financial and legal headaches. Rushing a sale or selling without fully investigating your options may cause you to miss out on better opportunities. However, waiting too long to sell can also spell disaster. Whatever your reasons for selling, it is important to discuss your plans with an experienced business law attorney so that you can receive accurate legal guidance personalized to your unique needs.

Start Preparing Sooner Rather Than Later

Experts suggest that business owners should start preparing for a business sale at least several years before planning to close the deal. This gives you time to ensure that selling is truly what you want and avoid the dreaded feeling of “seller’s remorse.” Preparing well in advance also allows you to gather the financial data a conscientious buyer will want to evaluate. Typically, buyers want to look at up to five years’ worth of tax returns, profit and loss statements, bank statements, supplier and vendor contracts, and other relevant documentation.

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Darien business succession attorney

Business succession planning is a crucial step for any business owner. You have probably put an enormous amount of time and effort into your company, and you want the business to continue to succeed after your retirement or death. A carefully designed succession plan gives you the best chances possible of avoiding problems during an ownership transfer. One of the most important considerations when building a comprehensive business succession plan is who you should choose as the new owner.

Selling Your Business to a Co-Owner or Employee

If you share your business with one or more partners, a natural successor may be one of your co-owners. Some partnerships choose to draft an agreement that permits the remaining owner to purchase a disabled or deceased owner’s business interests from his or her next of kin. This option can be especially advantageous if an owner unexpected passes away or becomes incapacitated through a major accident or illness. However, this option also requires co-owners to be prepared to buy out a partner's shares at a moment’s notice.

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Long Island Sound commercial and business law attorney

If you are considering purchasing a small business, you may understandably be experiencing a mix of excitement and apprehension. Being a small business owner can have tremendous personal and financial rewards, but the decision to purchase a business is not one to take lightly. It is very important to take your time and not rush this major endeavor. Thoroughly research your options and speak with a qualified business law attorney to ensure that your purchase goes as smoothly as possible. As you start the business purchase process, make sure to avoid the following common mistakes.

Not Asking Why the Business Is for Sale

The prospect of being a business owner, especially a first-time business owner, is an exhilarating idea for most entrepreneurs. Unfortunately, this enthusiasm can sometimes cause potential business owners to make hasty mistakes. One of the most common errors people make with regard to business purchases is not understanding why the business is for sale in the first place. Make sure you have a detailed conversation with the business owner about his or her incentives for selling the business. Business owners may not always be 100 percent honest about their reasons for putting the business up for sale, so you may also need to look for subtle clues that reveal the real motivation for the sale.  

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Long Island Sound commercial financing attorney

In order for any business to be successful, it must be able to grow and develop. While there are many ways to foster the expansion of a business, these techniques may require significant financial resources. Whether your company needs an increase in capital to hire additional staff members or to lease or purchase new machinery, a commercial loan could be the answer. As one of the most common approaches to funding a new business endeavor, a commercial loan can provide several advantages to a growing company. A knowledgeable business law attorney can help you secure the finances that are needed to grow and expand your operations.   

What Is a Commercial Loan?

Simply put, a commercial loan is a long-term, capital-heavy loan that typically has low interest rates and somewhat flexible payment options. In most cases, the approval process for this type of loan can be burdensome, which is why it is recommended to have a financing attorney help structure and apply for the loan. For business owners who are looking to foster the growth and development of their company, it is important to be aware of the benefits of obtaining a commercial loan. 

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Stamford, CT business attorney noncompete agreement

A noncompete agreement is a type of contract that prohibits an employee from entering into competition against his or her employer. Workers often have access to sensitive information about clients, customers, business operations, practices, strategies, and marketing plans, all of which can be used against an employer. If you are a business owner, you may wish to use a noncompete agreement, also called a noncompete covenant or covenant not to compete, to prevent your employees from using skills and information gained during employment to compete with you in any way. It is important for business owners to obtain legal counsel regarding noncompete agreements, as these documents must meet certain criteria in order for them to be enforceable.

Noncompete Agreements in Connecticut

A Connecticut noncompete agreement is a legal contract that prevents an employee from entering into direct competition with an employer during his or her employment or after his or her employment ends. A noncompete agreement can also prohibit an employee from disclosing business secrets and proprietary information to other parties during and after his or her employment. Noncompete agreements must be limited in their scope and duration in order to be enforceable by the court. Many noncompete agreements include a one- or two-year restriction period, but the amount of time the employee is prohibited from entering into competition can vary based on a range of factors. To be legally binding, a noncompete agreement can only prevent an employee from working in certain geographic areas. Blanket noncompete agreements that do not specify a reasonable time period and location stipulations will typically not be upheld by the court.

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Greenwich commercial and business law attorney

If you are a business owner, you know the vital importance of setting clear expectations for your employees. When a business is in its infancy and only has a small number of employees, you may be able to get away with verbally expressing rules and expectations to your workers. If you are heavily involved in the day-to-day operations of your business, it is easy to keep a watchful eye on employees to ensure that they are not exposing you to any liabilities. However, as your business grows and develops, the need for a written set of guidelines and expectations becomes critical. Creating an employee handbook that states employment policies, company rules, and how workers are expected to behave at work will help prevent employee-related disputes in the future.

Why You Need An Employee Manual or Handbook

An employee handbook contains a company’s practices, policies, and the legal rights and obligations of employees and their employer. Not only can this type of handbook protect you as a business owner legally, but it can also significantly improve the work environment. Many of us have had jobs where we were unsure of our role in the company or what was expected of us. It can be confusing and disheartening to be an employee and not feel like part of the team if other employees are not on the same page as you. An employee handbook can go a long way in establishing a culture of teamwork and professionalism at your company.

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Darien non-disclosure agreement attorneyBusiness dealings often involve the exchange of highly confidential information. A non-disclosure agreement (NDA) is an effective way for business owners and entrepreneurs to protect sensitive information from being shared or misused. An NDA is a legally enforceable contract that establishes a private relationship between two or more parties. The involved parties agree not to share or profit from confidential information to which they are made privy. NDAs, also called confidentiality agreements, are a valuable tool for businesses.

Non-Disclosure Agreements For Business Negotiations

Non-disclosure agreements can be used to protect sensitive information that is shared during business transactions, such as the buying or selling of a company. For example, if a business owner is interested in selling his or her company, he or she will almost certainly meet with potential buyers to discuss the business in detail. A potential buyer may have access to proprietary information, product designs, marketing strategies, trade secrets, business practices, and other information that could be used as leverage in other business dealings. Asking a potential buyer to sign an NDA prevents the buyer from misusing sensitive business information or sharing that information with others. If a party signs a confidentiality agreement and then violates the terms of that contract, the injured party has the right to seek financial compensation for breach of contract.

The two most common types of NDAs are unilateral NDAs and mutual NDAs. A unilateral NDA is a contract where only one party agrees not to disclose sensitive information. In a mutual NDA, all of the parties involved agree not to share certain confidential information.

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Long Island Sound business franchise attorney

Becoming a business owner can be one of the most meaningful career moves of your life. Owning your own business allows you to control how your business is run, decide how your employees are managed, and steer the business in the direction that you want. When buying a business, potential owners have two options: purchase a standalone business or a franchise location. There are both positives and negatives associated with purchasing a franchise business. It is important for anyone considering such a big purchase to research what owning a franchise business entails.

Franchised Businesses Have an Established Business Model

When a business becomes very successful, the owner may choose to franchise the company. This allows other private owners to purchase the rights to operate a franchise location of the larger parent company. Many first-time business owners find the option of buying an existing franchise location especially attractive. Unlike buying or starting an independent business, you will not need to create a business model from scratch when purchasing a franchise. An effective, reproducible business model already exists. In many franchise purchases, formal training from the parent company and ongoing support are also available. Of course, if you are someone who desires a great deal of freedom in how your business is run, you may not wish to be confined by a parent company.

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Norwalk business succession plan attorney

For a lot of business owners, their professional and personal lives can become intertwined. This is especially true for small business owners. Many of these businesses were founded by the current owner, while others may have been passed down through generations. Regardless of how a business was formulated, it is important to prepare for the next step by creating a succession plan. Business owners cannot run their business forever and must prepare for a future to avoid losing the business altogether. Delegating the livelihood you have created to another person can be difficult, but with the correct legal assistance, you can ensure that your business lands in the appropriate hands.

Who Can Take Over My Business?

There are five common ways in which a business owner transfers ownership of his or her company. Many business owners will choose a person with whom they are familiar to take on their business relations. This can include a current co-owner, a family member or heir, or a key employee who they think would best run the company. On the other hand, some owners wish to have an outside party, such as an entrepreneur, come in to bring new ideas to the table and avoid familial conflicts that can come along with passing your business to a relative. Businesses that have multiple owners can sell their ownership rights back to the overarching company. 

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