Preparing For a Business Buyout in Texas

A common mistake that many business owners make is neglecting to create buyout agreements. Buyout agreements are critical when you co-own a company with other partners.

Understanding Buyout Agreements
A buyout agreement specifies what is to happen when an owner of your company wants to leave or when a new owner is brought on. Besides an owner wanting to leave, there are other situations that may arise that will require a buyout agreement, such as a:

  • Bankruptcy
  • Divorce
  • Death

Common Buyout Triggers
It is a critical mistake not to think that circumstances in your company will change over time. There are common events that can trigger and create a scenario where an owner’s interest in the company may need to be transferred or sold. Common triggers include:

  • An owner’s decision to retire or resign
  • An accident that leads to an owner’s death or inability to participate in the company
  • An offer to acquire an owner’s interest in the company
  • A foreclosure of a debt secured by an owner’s interest in the company
  • A personal bankruptcy or divorce settlement where an owner’s ex-spouse is expected to receive an interest in the company

Creating a Buyout Agreement
A buyout agreement is a legally binding contract between members and should be created carefully. A lot is at stake and an experienced Dallas business attorney should draft the agreement.

At the Ferguson Law Group, we are experienced in creating buyout agreements for companies of all sizes. We understand that each situation is unique and can help you create a buyout agreement in the event an owner wants to leave.

If you are preparing for a business buyout, you should call one of our Dallas business attorneys at the Ferguson Law Group at (972) 378-9111.

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How We Can Help You With Your Private Placement Memorandum

Regulation D is an efficient exemption mechanism in which to secure equity financing. It allows you to procure financing through a limited offer and sale of your company’s stock or securities without the requirements of registering under the Federal Securities Act of 1933. Part of the process is developing your private placement memorandum (PPM).

A Dallas securities law attorney can help
Making sure your private placement memorandum is developed properly is paramount. At the Ferguson Law Group, we are experts and can help you every step of the way. Part of that process includes:

  • An initial discussion to help us understand the goals of your offering
  • A review of any existing materials that you possess. These materials may include your business plan and marketing research
  • Additional detailed discussions to better understand your goals
  • Additional research, if required
  • A PPM draft
  • Assistance in helping you understand the best way to deliver your presentation, as well as how to answer questions
  • Continual support
  • The facilitation of any regulatory filings

Raising capital
Raising capital is the basic goal of any PPM. However, it is critical that you understand the common rules, as they relate to Regulation D. We will help you understand the nuances of the securities laws that you will need to abide by. Three of the common rules include:

  • Rule 504: Generally applies to securities sales up to $1 million
  • Rule 505: Generally applies to securities sales from $1 million to $5 million
  • Rule 506: Generally applies to securities sales in excess of $5 million

If you are getting ready to develop your private placement memorandum, you should call one of our Dallas securities law attorneys at the Ferguson Law Group at (972) 378-9111.

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When is the Right Time to Sell Your Dallas Business?

There is more to selling your Dallas business than gut feelings and opportunities. Timing is everything. However, identifying when it is the right time to sell can be a difficult process.

No matter the type of business you own, the chances that there is an interested buyer out there are good.  So, is it the right time for you to sell?

Do you have a compelling reason to sell?
It might be the right time to sell if you have a compelling or motivating reason. Everyone has their reasons for selling a business. You need to spend a great deal of time considering why you want out. The last thing you want is to regret this decision. Factors to think about might include:

  • Investment considerations
  • Financial considerations
  • Strategic business considerations

Are you confident that the sale will meet your objectives?
You should also spend time outlining your objectives for selling your business. You may even want to make a list. Your objectives might include:

  • Your desired profit
  • Spending more time with your family
  • Relieving stress
  • Retirement

Are you psychologically prepared?
When considering selling your business, you must be psychologically prepared to relinquish control and ownership. You have probably grown accustomed to calling the shots. This sudden change in your lifestyle can impact your financial security and your family relationships, as well as create unexpected emotional stress.

An experienced business attorney can help you address these factors and ultimately help you with the sell of your business, if that is the route you choose.

If you are looking to sell your business, you should call one of our Dallas business attorneys at the Ferguson Law Group at (972) 378-9111 for more information.

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What Every Buyer Should Know When Purchasing a Dallas Business

There are many factors to consider when buying a Dallas business. You might be signing up for longer hours, which equates to more time away from your family. You might be facing additional worries and headaches to which you are accustom. However, the financial and personal rewards can make it all worth your investment.

Three factors to consider
If you are in the market to buy a Dallas business, there are three factors that you should initially consider:

  • Is the business right for you and your lifestyle? When choosing the right business, it is important to determine if that business is conducive to your lifestyle and temperament. Buying the wrong business can create additional stress that you are not prepared to handle.
  • Is the potential success for the business worth it? Not all businesses make as much money as business owners think. Make sure the return on your investment is worth all the work and financial sacrifices you will be making.
  • Are the risks worth it? All businesses come with risks. You need to be financially prepared in the event you experience unexpected expenses or if the business doesn’t perform as expected.

Seek legal advice
There are also many legal factors to consider when buying a business. An experienced Dallas business attorney can help you assess the risks and help you with the acquisition process. Ultimately, they can help set you up for success.

If you are looking to buy a business, you should call one of our business attorneys at the Ferguson Law Group at (972) 378-9111 today.

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The Purchase and Sale Agreement for Your Dallas Business

There are many factors to consider when buying or selling a Dallas business. One of the most important documents required will be the purchase and sale agreement.

The basics of a purchase and sale agreement
The purchase and sale agreement offers the roadmap in which the transaction will take place. It outlines the predetermined formula in which ownership and monies will be transferred.

Items considered in a purchase and sale agreement
The details concerning the purchase or sale of a business can seem endless at times. The major points of interest that will be included in your purchase and sale agreement include:

  • The entity being sold or purchased
  • The purchase amount
  • The timeframe in which the transaction will take place
  • All the parties involved in the transaction
  • How any money or profits will be disbursed and to whom, including the proprietor, partners and/or shareholders

Buying and selling a business includes many legal factors. An experienced Dallas business attorney can help you with the acquisition or the sale of your business. He or she can also help you understand the nuances of your purchase and sale agreement.

If you are looking to buy or sell a business, you should call one of our Dallas business attorneys at the Ferguson Law Group at (972) 378-9111.

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Determining Value Before Selling Your Dallas Business

If you are considering selling your Dallas business, the first thing you need to determine is what your business is worth. There are many factors to think about and an array of valuation methods to utilize in determining how much you can sell your business for.

You have to keep in mind that if the price of your business is too high, you might discourage potential buyers. If your price is too low, you might find yourself leaving money on the table. Determining the ideal price can be difficult. Fortunately, there are some common approaches you can use to find the ideal asking price.

Income valuation approach
This approach entails analyzing the revenue generated by your company compared against operating costs and other liabilities. This will help the buyer determine what kind of return to expect on the investment.

Asset-based approach
Total up the value of all the assets held by your company. Items to consider include:

  • Land and physical structures
  • Office furniture
  • Trademarks
  • Copyrights

Comparables
This is the ideal approach. Examining the worth of similar companies in your area can give you a realistic idea of your business’s worth. Research the companies that have sold in your area and find out the final sales price.

Industry formulas
Each industry is unique, offering specific formulas you can use to determine your company’s value. Take the time to discover which formulas are most common in your industry.

Professional resources, including an experienced Dallas business attorney, can assist you in determining the best valuation method for your business. They have the necessary knowledge to help you sell your business.

If you are looking to sell you business, you should call one of our Dallas business attorneys at the Ferguson Law Group at (972) 378-9111.

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Using Commercial Real Estate as Collateral for a Business Loan

Taking your company to the next level generally requires a substantial amount of capital. However, finding additional capital can be tricky.

Common ways to turn equity into cash
If you own commercial property and have equity in your building, land or equipment, you might be able to use it as collateral and turn that equity into cash by getting a loan with a:

  • Bank
  • Commercial finance company
  • Savings and loan company
  • Insurance company

This can give you the necessary equipment to expand your business and ultimately make more money.

You may have options, even if you currently have a loan
You may not own your land or building outright. However, if your property has increased in value since you first obtained your loan, you might be able to refinance it. Your new loan will pay off the original balance, leaving you with the difference to reinvest back into your business.

Enlisting professional help
Signing the necessary paperwork to use real estate as collateral is no minor endeavor. There is generally a lot of fine print in the documents. An experienced Dallas commercial real estate attorney can help you understand the nuts and bolts of the documents you are signing and  make sure everything is in order.

If you are looking to use commercial real estate as collateral for your business, you should call one of our Dallas commercial real estate attorneys at the Ferguson Law Group at (972) 378-9111.

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Forming Your Entity – Dallas Business Lawyer Explains What You Need to Know

If you are starting a business, then you will need to form an entity. An entity is an organization or institution which has its own existence for legal and/or tax purposes.

Types of entities
There are many types of entities to choose from. An experienced Dallas business lawyer can help you determine which of the following entities best suits your needs:

  • Corporation
  • General partnership
  • Sole proprietorship
  • Limited liability company (LLC)
  • Limited partnership (LP)
  • Trust
  • Estate

How an entity is treated
In short, an entity is treated like a person. An entity can legally function, have agents to make decisions, such as entering into contracts, and be sued.

Other considerations
There is a lot that goes into forming a legal entity. The following should be discussed with your attorney:

  • The purpose for your entity
  • Filing fees
  • How your entity will be managed
  • Potential tax consequences
  • Creation of bylaws

If you are looking to create an entity, you need to make sure it is done right. Call one of the Dallas business lawyers at Ferguson Law Group at (972) 378-9111 for answers to your questions or to schedule a legal consultation.

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Dallas Business Lawyer Discusses When to Restructure Your Entity

There are many reasons to restructure your entity. For starters, not all entities, whether a corporation, LLC, or partnership, are created properly and/or have all the necessary forms filed. Having an entity not structured properly can have expensive consequences.

The devil is in the details
There is a great deal of paperwork involved in forming an entity. In many instances, necessary and important forms are neglected. It’s important to speak with someone who is familiar with the required forms for an entity and who can review your entity to ensure everything is on order.

Evaluating your entity
The current recession may have you considering the structure of your company and career. You may be taking a harder look at your current operating structure, both functionally and legally. There are many considerations to look at when determining whether you should restructure your entity, such as:

  • Changing the nature of your business: Refusing to change with the times, whether it’s to your product line or not exploring new markets, can render your company obsolete. Diversifying can result in a prosperous future.
  • Downsizing: Downsizing the workforce is a common reason to restructure. Having a smaller workforce may require immediate changes to your entity’s structure.
  • Technology: The advancement of technology may require you to make important changes to ensure your competitiveness in today’s market. Technological innovations may prompt you to modify your product line, work processes and allow you to leverage the power of information.

No matter the reasons for restructuring your entity, an experienced Dallas business lawyer can help you put all of your ducks in a row.

If you are looking to restructure your entity, you should call Ferguson Law Group at (972) 378-9111 today.

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How a Dallas Business Lawyer Can Help Review Your Business Contract

Are you currently sitting on a  business contract and trying to make heads or tales out of it? If so, an experienced Dallas business lawyer can help you understand the nuances of your contract.

Negotiating your contract
For starters, your need to understand that before both parties sign the contract, everything is negotiable. A lawyer can help you negotiate and understand:

  • All the duties and obligations that you will be responsible for
  • Your intentions, requirements and expectations through the contract. An attorney will assist in making sure that the other party is clear of these before the contract is mutually agreed upon
  • What remedies are available to you in the event there is a breach of contract, whether by you or the other party

Understanding the legalese
It takes a law degree in most cases to understand the language of a business and/or transaction contract. That is exactly why you should consult with an attorney. A Dallas business lawyer can help you make sense of the obligations and terms listed in your contract and assist you in understanding what your particular contract says and means.

It comes down to dollars and cents
All contracts come down to money. Your attorney will review your contract and help you understand your financial obligations. Most importantly, a lawyer can help you recognize any potential tax ramifications associated with the contract you are about to enter in and negotiate any necessary changes to your advantage.

If you are entering into a contract and have questions, you should call Ferguson Law Group at (972) 378-9111.

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