Category: Corporate

For senior-level employees, phantom stock agreements have many of the same benefits as standard stock compensation agreements/plans except without the eventual right to vote the “shares” and loss of capital gains tax treatment on some income in some circumstances. For corporate entities, the benefits are also similar, but without having to dilute voting rights among […]

If you own a closely held business, the owners/partners will greatly benefit from entering into what is typically called a “Buy-Sell Agreement.” The basic idea is to ensure that ownership shares/units are not sold to third parties without the agreement of the owners. Likewise, the agreement ensures that the shares/units of any departing owner are […]

When a business sells substantially all of its assets, the Asset Purchase Agreement will contain a section containing representations (“rep” for short) and warranties. These are generally styled as statements of fact concerning various important aspects of the assets and the transaction. Generally, the seller provides the majority of reps and warranties (although the buyer […]

Non-compete agreements/clauses are generally required when a business or substantially all of its assets are sold. Buyers require this generally to prevent the management and high-level employees of the seller from opening a new business in competition with the one that has just been sold. For obvious reasons, the buyer does not want the seller’s […]

In an asset purchase transaction, “transition services” refer to the idea that, as part of the deal, the seller agrees, post-sale-consummation, to help the buyer with some aspect of the transaction. This might entail helping the buyer integrate some newly acquired asset into the buyer’s business operations or training the buyer’s staff/employees on use, etc. […]

When one company — or other type of business entity — buys the assets of another, the companies negotiate and execute a detailed Asset Purchase Agreement. Among many other sets of provisions, there is a series of clauses called “indemnification” or “hold harmless” clauses. The purpose of an indemnification clause is to shift the risk […]

The common and legal definitions of a trade secret overlap, but the legal definition has a great many nuances. In common understanding, a trade secret is something a business or a company keeps secret. Famous examples include the secret formula for Coca-Cola and the recipe for Kentucky Fried Chicken. Note that the “trade” aspect of […]

In the United States, generally speaking, businesses have the legal privilege to compete against each other in the marketplace. Businesses are legally allowed to use any lawful means in that competition to sell their goods and services and to “woo” customers. However, the privilege to compete involves only LAWFUL means and methods. That said, some […]

A trademark is a valuable business and personal asset. Like other assets, a trademark can be sold, transferred, licensed, used as collateral for money financing, etc. However, a trademark is an intangible asset, and as such, when trademarks are sold or transferred, the proper legal papers must be drafted and executed. It is NOT like […]

In the legal field, the word “tort” is a very broad term that means any cause of action for any sort of injury/damage inflicted by the actions of a person or business. The injury caused can be physical, such as an injury to a person or damage to physical property. The injury caused can also […]