Small or large, your business is likely a source of great pride. It must conform to state and federal laws regarding payment and treatment of employees, and the type of legal entity you choose can affect a great deal in the future. You might also need help in obtaining financing and with lease negotiations, as well as legal assistance with other business issues.
The business ownership life stage covers the many legal facets of owning your business. The information and videos below may help answer some of your questions, but please call one of our business attorneys for assistance with your particular situation.
- Asset Based Loans
- Avoiding business bankruptcy proceedings
- Borrower Representation
- Brownfields Redevelopment Counseling
- Employee handbooks
- Employment policies and procedures
- Family limited partnerships
- Like-Kind Exchanges or 1031 Exchanges
- Negligent hiring prevention/defense
- Non-competition agreements
- Severance agreements
- Succession planning
- Wage and Hour
- Worker's Compensation
Arbitration is a form of alternative dispute resolution and a legal technique for the resolution of disputes outside the courts resulting in either a binding or non-binding decision of the arbiter.
Our arbitrators can help you by conducting hearings and making determinations as an impartial referee by providing an authoritative judgment.
Whether you are providing asset based financing to fund ongoing working capital needs, machinery and equipment, or commercial real estate, we can assist you with properly documenting and securing the necessary credit facilities.
Most small businesses are financially cyclical to some extent, with some days, weeks, months and years better than others. Although good financial planning can lessen the impact of economic downturn, many businesses do experience some level of financial hardship at one time or another. These times can be especially difficult if the business owner becomes uncertain of his ability to make a monthly payment to a secured lender.
There are ways to deal with cash-flow problems as they apply to secured lender obligations. It is important to put them into perspective by way of a timeline. Usually the inability to pay is not an unforeseen occurrence discovered on the day a payment is due, but rather is foreseeable at least 90 to 120 days in advance. This is generally the most crucial time period and is referred to as "pre-default".
The biggest mistake small business owners tend to make during the pre-default period is ignoring the imminent financial tidal wave because they unreasonably believe that a miracle correction will set things straight. However, if the issue is acknowledged quickly at the outset, there are more options available to correct the situation. In addition, pre-default solutions are generally easier to impose and less costly than after the "tidal wave" hits.
Our attorneys can help you to avoid complex, costly, formal, and public bankruptcy proceedings when financial hardship arises.
Construction Loans - If you're looking for an often short-term, interim loan for financing the cost of residential or commercial construction, rather than outlaying the entire principal amount of the loan at once, your lender can disburse the funds to you in accordance with a construction schedule as your project progresses. We can provide you thorough assistance to ensure that your construction project financing moves forward on the anticipated schedule.
Purchase Money Financing - This is when the seller of equipment (e.g. machine, device, or vehicle) provides the financing for the acquisition of the equipment to the purchaser and agrees to take back a lien on the equipment as collateral security for the financing. We can assist you in making certain that new equipment is financed expeditiously to avoid any interruption to your ongoing business operations and ensure your business' continuity.
Asset-Based Loans - This is a commercial loan secured by your company's 'personality' as well as its real property assets. In addition to the lender receiving a real property mortgage on real estate as collateral for the loan, the lender may also collateralize the loan by a lien on accounts receivable (A/R), inventory, and equipment. Often the amount of the loan is directly related to the value of the assets, as measured over a period of time, e.g. annually. We can demystify the complexities of asset based financing, and ensure that all borrowing requirements are clearly stated and understood.
Equipment Leases - By obtaining the use of machinery, vehicles, or other equipment on a rental basis versus purchase, you avoid the need to invest significant capital for a purchase. This prevents the need to invest capital in equipment. Ownership rests in the hands of the financial institution or leasing company, while your business has the actual use of the equipment. We can work with you to ensure that lease terms are commercially reasonable, agreeable, and provide for favorable terms and conditions.
A Brownfield site is real property in which the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. Brownfield sites are often abandoned industrial or commercial sites.
Previously, both developers and their lenders steered far clear of these sites for fear that the substantial environmental cleanup costs involved would reduce the anticipated project profit margin. Commercial lenders also feared that, in the event of a foreclosure, the bank would be burdened with a contaminated property and substantial attendant cleanup costs.
New federal and state legislation (the Small Business Liability Relief and Brownsfields Revitalization Act, and the Brownsfields Act: Chapter 206 of the Acts of 1998, respectively) now provide financial incentives that can allay these concerns and have reinvented the business model regarding these sites. Our attorneys can help guide you through the process of purchasing and developing a Brownsfields site.
There are constant and ongoing changes occurring within employment law. These changes can result from many sources including the legislature, various regulatory agencies, and court cases. To avoid litigation, your company's policies and procedures should reflect the latest state of the law. A comprehensive employee manual is a great way to start, but if you fail to regularly update that manual to reflect the current laws and standards, it isn't worth much. A company audit is an ideal way to ensure that you are in full compliance. Our attorneys can help you protect your business by keeping you apprised of current employment law.
In addition to your employee handbook, it is important to have written policies in place that address issues such as sexual harassment restrictions, as well as email and Internet use. Bacon Wilson provides legal advice in these areas.
In a family limited partnership (FLP), family members (typically parents) put assets into a partnership, and then give minority interests to other family members, typically children, while the general partners retain control of these assets. This gives the parents an opportunity to shift assets to their children. The FLP also allows children to manage their parents' assets such that, following their parents' deaths, those assets do not need to be probated.
An FLP provides a good option for parties seeking to protect their family assets. It removes the assets from their estate while still retaining control over them. The partnership becomes its own entity, with its own tax identification number, which can then conduct the same activities as an individual or a corporation.
There are significant advantages to using a family limited partnership as a part of your estate plan:
- The general partners retain control over the assets and can decide whether to distribute or reinvest any income or profits from the partnership.
- Restrictions can be placed on the limited partners, such as a restriction from transferring or selling their interest, thus ensuring that wealth stays within the family.
- A family limited partnership can protect assets in the event that a limited partner gets a divorce or has trouble with creditors.
- FLPs provide greater flexibility than other estate planning devices such as an irrevocable trust. For example, the partnership may be amended or terminated upon agreement of the members, and can provide that all disputes be resolved through arbitration, rather than in court.
- Perhaps one of the largest advantages to a family limited partnership is the valuation discount. This valuation discount is due to a limited partner's lack of control and marketability in their interest. For example, a gift of10% interest in a $1,000,000 limited partnership has a substantially lower value than a gift of $100,000 for gift tax purposes. With careful drafting, a gift of a partnership interest can fall under the annual gift tax exclusion.
By using a family limited partnership, families with significant assets can significantly lower both their gift and estate tax payments. Our attorneys can advise you in this matter.
Massachusetts law may hold employers liable for harassment or retaliation, be it sexual harassment or for other reasons, even if it was not a supervisor who engaged in prohibited activity. If a supervisor or a managerial employee learns that a worker is being harassed by another employee, it is imperative that immediate remedial steps are taken to avoid liability. It is a good idea to consult with an employment law attorney to avoid problems.
Conducting a "like-kind" exchange under the Internal Revenue Code section 1031 is one of the few legitimate tax shelters available to individuals, corporations, and other business entities engaging in the disposition of assets. Deferred exchanges allow taxpayers to engage in transactions for the exchange of like-kind property and avoid capital gains tax on the appreciation in the value of their property. A 1031 exchange (or a tax-deferred exchange) permits investment property owners to sell a property and defer tax payments by reinvesting the proceeds of the sale into a like-kind property.
Simply put, a like-kind exchange is a method whereby a property owner trades one or more relinquished properties for one or more replacement properties of like-kind, while deferring the payment of federal income taxes and some state taxes on the transaction. The Bacon Wilson legal team can help.
An employer may be held liable for an intentional or illegal act committed by his employee. The employer's knowledge of past acts of impropriety, violence, or disorder by an employee may be sufficient to forewarn the employer that the employee may engage in future wrongful conduct. Bacon Wilson can help counsel you in hiring responsibly and what to do if you find yourself the target of a negligent hiring suit.
Many companies find it necessary to have agreements with employees that protect against competition and the use of company trade secrets by departing employees. The laws regarding enforceability of these agreements are complicated. Bacon Wilson can offer you legal counsel in this matter.
There are two primary goals of employers in offering severance packages to employees: first, extending fairness and compensation to longer-term employees and second, reducing the employer's exposure to potential liability in a lawsuit or administrative claim. Severance packages are complicated and best offered under the direction of an employment law attorney.
Owners of closely held business must plan well in advance to prepare for and ensure the continued success of the company following a triggering event such as the death, disability, or retirement of one of its shareholders. For family-owned businesses looking to carry the organization along through generations, the typical track record is ominous. According to the Small Business Administration, 90% of the 21 million U.S. businesses are family-owned, and one-third of Fortune 500 businesses are either family-owned or family-controlled. However, only 30% of family-run companies today succeed into the second generation and only 15% are passed on into the third generation. At Bacon Wilson, we can assist with the orderly transition of your business.
It is inevitable that there are times when an employer will have to perform the unpleasant task of firing one or more employees. With a little preparation, termination can be handled in a manner that minimizes an employer's potential liability. Our legal team can provide assistance with termination situations.
Revocable trusts, also known as an "inter-vivos trusts" or "living trusts", are among the most useful estate planning tools for the management and distribution of family assets. Trusts serve a wide range of functions and may be appropriate for a variety of family financial circumstances and goals.
A common misconception is that trusts are only for the very wealthy. In reality, trusts can be used in variety of different circumstances and are a powerful way to manage assets.
Forming a trust consists of several steps:
- The trust is created by the "grantor".
- The trust is funded, meaning that the grantor's assets are placed into the trust. Assets can include stocks, bonds, mutual funds, real estate, bank accounts, etc.
- The trustee(s) accept the responsibilities as expressed in the trust document. The trustee can be the grantor during his or her lifetime.
- The trust itself contains dispositive provisions to instruct the trustee in managing the investments and distributing income or principal to the beneficiaries. This is the roadmap detailing how your property is distributed.
- Beneficiaries are chosen to benefit from the trust. This typically includes the grantor during his or her lifetime, as well as family, friends, or charities upon the grantor's death.
There are a number of helpful functions that trusts can perform:
- A trust can help with business succession when it is desired that certain parties run the business and others benefit from its gain.
- A trust can ensure the continued management of a business or personal finances.
- A trust can direct the trustee to provide full management in the event of incapacity.
- Assets held in a trust avoid probate and its attendant delays and costs.
- Dearly loved pets can be cared for upon the death or incapacity of the owner.
- The trust can be part of overall estate planning and can allow for control of assets even after death.
A trust has a number of beneficial attributes. The trust, and therefore its assets, can be professionally managed if you name a bank or trust company as its trustee. Certain tax benefits can be gained, especially for married couples. Financial privacy is maximized when your estate avoids the public process of probate.
Other types of trusts include:
- A special needs trust to maintain benefits for a disabled individual
- An irrevocable trust to allow life insurance benefits to pass tax-free to younger generations
- An alternative irrevocable trust to protect assets from long-term care expenses
Bacon Wilson's experienced attorneys can help you navigate your trust options and select the type most appropriate for your needs.
The way employers compensate their employees and account for their time has become a crucial issue for companies. With an increase in the penalties that courts are awarding, in addition to unpaid wages, interest, and attorneys' fees, complete compliance is essential, as penalties could be exponential. Our employment law practice group has significant experience in representing employers and employees in wage and hour claims to help you, including:
- Defending employers in individual and class action litigation brought by private plaintiffs
- Representing employers in disputes with governmental agencies
- Auditing pay policies to ensure compliance with state and federal regulations
- Advising employers in the administration of day-to-day payroll processing disputes
- Representing Plaintiffs in actions against employers for failure to properly pay wages.
Our unique position of being capable of representing both employers and employees provides you with invaluable experience in the field of wage and hour law.
If you have been injured on the job, or if you are an employer with an injured employee, you likely need assistance navigating the complex regulations surrounding Worker’s Compensation in Massachusetts. The Department of Industrial Accidents (DIA) oversees the dispute process between employers and employees. Whether you need assistance with filing a claim, dealing with an insurer, conciliation, conference, hearing, or appeal to a review board, Bacon Wilson’s team of expert employment law attorneys can guide you and help you reach a satisfying resolution.
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