Business Attorneys Pro Panel
Even the most educated, seasoned employers can feel overwhelmed and frustrated when it comes to addressing the variety of legal issues that business owners face. We compiled a panel of local experts to guide you through some of the most pressing questions facing employers today.
Bryan Wade - Husch Blackwell | Mike Nichols - Spencer Fane | Heather Rooney McBride - Rooney McBride & Smith | LLC., Britton Jobe - Neale & Newman
Why do I need to set up a business entity instead of just doing business under my name?
Bryan Wade You may not need to, but it’s always a good idea to consider. There can be liability and tax advantages depending on the situation. Doing business in your name potentially exposes personal assets each time you enter into a transaction. It also creates the opportunity to intermingle personal and business assets, obligations or expenses, which can create tax challenges.
Britton Jobe No matter what size your business is, there are many reasons it may not be advisable to do business under your own name. If set up and operated correctly, a business entity, such as a corporation or limited liability company, separates your personal assets from your business assets and helps insulate you personally from business liability. Certain types of entities may also provide your business with various tax benefits. Knowledgeable attorneys can help you form and maintain an appropriate business entity and work with your tax professional to structure your business in the most advantageous way.
Heather Rooney McBride A business entity provides liability protection. This means that if your business were to be sued, and you have a limited liability company or a corporation, only the assets of the business would be available to pay a creditor. In contrast, if you just have a d/b/a and have not formed a business entity, a successful creditor could reach your personal assets.
For most businesses, why are LLCs more advantageous to use rather than a corporation form of business?
Mike Nichols Corporations have several disadvantages compared to limited liability companies (LLC’s). Corporations are very rigid in how they must be operated. There are mandatory meetings, annual filings and restrictions on how the shareholders are treated. While corporations provide limited liability protection like LLCs, they are procedurally cumbersome to operate. If you don’t follow those rules, you expose yourself to losing the very limited liability protection you were originally seeking. However, LLCs were created to be very flexible in terms of how they are structured and ran. There is great freedom in how the management of the company is handled. Between the members, you can have varying levels of capital contribution requirements and profit distributions. You can easily delegate different obligations to different members, and there are no required annual meetings. LLCs are just a kinder, gentler form of legal entity that is preferable for most businesses.
Bryan Wade Fewer corporate formalities, less cost and fewer tax filings, depending on the circumstances. For example, an LLC can be managed by one person rather than an officer or officers of a corporation reporting to a board of directors. The LLC provides this management flexibility while still providing the personal liability protection of a corporation.
What records do I need to be keeping as an LLC or a corporation, and why?
Heather Rooney McBride The records you need to be keeping depend on what type of entity you have and what the governing documents of your entity require. Generally, however, a corporation needs to have regular shareholder and director meetings, and minutes of those meetings should be kept in the corporate records. Likewise, evidence of the number and type of shares that each shareholder owns should be kept in the corporate records. Limited liability companies have fewer documentation requirements than corporations, but in addition to a written operating agreement, I recommend that the members (owners) meet regularly and keep minutes of their meetings.
Mike Nichols All businesses need to keep their tax records, corporate organizational documents, employee files and other written contracts. Some records are required to be maintained for a certain number of years. However, a good general rule of thumb is to keep your records for at least 10 years. With electronic storage so widely available these days, I would suggest converting your records to an electronic format and keeping them indefinitely.
Why is it important for family members or close friends to formalize their partnership agreement rather than relying on a handshake?
Britton Jobe Not only is it essential to have a written partnership agreement, it is important to formalize any business transaction in writing. First, if any issues arise in the business relationship, a written partnership agreement takes the uncertainty out of the terms of the agreement. Second, having to sit down and come to an agreement on business decisions before the business relationship is formalized makes it less likely that major disputes will arise in the future. It is unlikely that an informal handshake agreement will address all or even most of the issues that may come up throughout the business relationship. This is another reason it is important to consult an attorney in drafting a partnership agreement because an attorney can help guide you through many of the issues that need to be considered while forming a business.
What services do you provide for businesses?
Bryan Wade We provide a complete range of business legal support including corporate structure, contracts, employment and operations. Those services include industry-focused services such as energy and natural resources, financial services, food and agribusiness, healthcare, real estate, manufacturing and transportation.
Mike Nichols I am a business transaction attorney. I represent businesses in all kinds of general business transactions such as forming new entities, drafting partnership agreements, negotiating contracts and advising on business operations. I also do real estate development work. I assist clients with general issues such as real estate contracts, zoning issues and easements. Beyond that, however, I also negotiate public-private partnerships between developers and public entities allowing for cooperative development of properties for the mutual benefit of the parties. I represent developers with real estate financing incentive programs such as community improvement districts (CID), tax increment financing (TIF), neighborhood improvement districts (NID) and tax abatements. I also negotiate construction contracts. The last major area of my practice is financing. I represent banks and non-bank clients in the negotiation and drafting of loan documents for commercial and real estate loans.
Heather Rooney McBride I provide comprehensive business services, meaning that I form businesses and draft formation documentation; negotiate and draft contracts of all types for businesses; advise businesses on mergers and acquisitions, real estate and development matters, worker’s compensation, collections and employment/human resources matters and I handle most types of business litigation.
Britton Jobe Neale & Newman is a full-service law firm for individuals and business owners. I love being able to help clients with their litigation needs while giving them the assurance that we are here for them for almost any other legal services their business may require. For example, we can help an existing business buy, sell or expand. We can help someone who wants to start a new business. We can help make decisions about succession planning and integrate their business into their estate plan. It is a terrific business tool for business owners to know they can count on one firm for almost any legal need they may come across.
What kind of cases or transactions do you handle?
Bryan Wade I handle a broad range of commercial and business issues related to contracts, governance, operations and employment. I also do First Amendment and defamation work. In addition, we have attorneys with expertise in the fields of energy and natural resources, financial services, food and agribusiness, healthcare, real estate, manufacturing and transportation.
Heather Rooney McBride I handle all types of commercial transactions including real estate, business matters, mergers and acquisitions and employment agreements. I also frequently handle business litigation matters.
Britton Jobe I am very fortunate to work for a full-service law firm at Neale & Newman. While I have developed a litigation practice in which I represent a full slate of individuals and locally owned businesses in resolving disputes both inside and outside of the courtroom, I take advantage of the broad experience held by other attorneys at the firm. I am happy to tell clients who may have a question about estate planning or buying or selling a business that, even though those are not areas in which I have focused my law practice, I can refer them to a lawyer down the hall from me in my office. With our many experienced attorneys in multiple practice groups, our clients receive the best of both worlds in that they receive the tailored and personal service of a small firm with the resources and practice variety of a large firm.
Do you frequently go to court?
Heather Rooney McBride Yes, I appear frequently in southwest Missouri state and federal courts. I am also licensed to practice in Arkansas and Oklahoma.
Mike Nichols As a business transaction attorney, I personally don’t go to court very often. If a situation arises where a client is forced into litigation, I have partners who do litigation work. I seek the assistance of my litigation partners to help me and my clients through those situations.
Once I’ve decided to hire an attorney to represent my business, what should I look for in an attorney or law firm?
Bryan Wade Find a lawyer that understands your industry. If you’re hiring an attorney because of a lawsuit, find a lawyer that understands the dispute and has expertise in the field.
Britton Jobe Your business should look for a partner, not just an attorney. The more familiar your attorney is with your business, the more your attorney can help your business grow and succeed. For that reason, it is important to find an attorney with experience and the capability to handle any obstacles your business might encounter. While most attorneys can file the appropriate initial paperwork to form your business entity and obtain the required licenses, your business needs more than that. You need a legal partner with a command of the relevant laws and regulations to keep you out of court as much as possible and a capable litigator in the event you need to file or defend against a lawsuit. You also need an estate planner to guide you through the process of updating your estate and succession plan to accommodate your new or expanding business. An attorney or law firm should be a resource, and you should look for the best resource for your business.
How frequently should I meet with my attorney to update my business and succession planning?
Britton Jobe Our firm recommends meeting with your attorney annually to update business and succession planning. Statutes, regulations and even case law are always changing and evolving. Meeting with your attorney annually allows for updates to be made based on these changes and ensures your business and succession plans occur in the manner you intended. In addition, major life events (such as a marriage or death in the family) present a good time to revisit the planning that has taken place and make any updates that are necessary based on those major life events.
Heather Rooney McBride I suggest you meet with your attorney concerning your governing documents and succession plan every three years or at any point in which there has been a death, a buyout or another major change in the ownership or structure of your business.
How can I be sure my business is complying with laws and regulations?
Bryan Wade Work with an attorney that knows your industry. For example, if operating a manufacturing facility you need access to environmental, labor and business expertise.
Mike Nichols You need to be proactive with your business. Reach out to relevant government agencies. Join industry support groups to stay informed. Lastly, consult with your attorney, accountant or other relevant advisors. Laws and regulations are ever-changing. It is difficult enough to keep up with all of the laws at a high level. The details typically get businesses in trouble. You need to understand the nuances of the laws and how they may affect your business. Build a good team of consultants and advisors, and then lean on them. Let them relieve the stress of understanding the web of laws that affect your business. Always remember that it is okay to admit you don’t know everything. I do it every day.
Heather Rooney McBride Working closely with an attorney who understands you and your business is important to ensure your business is compliant. Each business needs to choose an attorney who is well-versed in the applicable laws and regulations that pertain to the business. I provide my clients with periodic legal updates about changes in the law and trends in compliance issues.
How do attorneys keep up with all the changing laws and regulations?
Bryan Wade A careful attorney typically subscribes to legal publications and receives a certain amount of annual continuing legal education to stay abreast of changes in the law.
Mike Nichols It is an ongoing process. The law is an enormous animal. No one can be an expert on all areas of law. It is smart for an attorney to define a scope of practice and then generally live in that area. By doing so, you become very familiar with the laws that affect that practice, and it is easier to keep with changes in that area of law. It would be impossible for anyone to know, understand and keep up with every law on the books. The important issue is not how we keep up with the laws; it is becoming well-versed in and thoroughly understanding the laws that affect your practice. In my case, if I am not an expert on a particular area of law affecting my clients, I reach out to the partners in my firm who are experts in that area to advise the client. That is why I believe having partners with a broad range of legal expertise is a valuable asset for any business owner.
As a business grows, are there additional legal issues to contemplate and address?
Britton Jobe There are many issues that will need to be reviewed and refined as a business grows. The number of employees a business has will dictate the applicability of many state and federal regulations such as the Family and Medical Leave Act, the Affordable Care Act, Workers’ Compensation, the Americans with Disabilities Act and the Age Discrimination in Employment Act. Consulting with an attorney as your business grows will help you keep informed of which laws are applicable to your business and how they should be addressed. Business growth can also lead to the acquisition of other businesses or the need to acquire additional space to house your company’s operations. As these issues arise, ensuring the company is protected in its expansion efforts requires the sound legal guidance of an experienced attorney.
What should I do if my business is served with a lawsuit?
Bryan Wade Contact a lawyer. Service of the complaint or petition triggers certain deadlines that must be met. If you miss a response deadline, you could be in default.
Britton Jobe First, there is no need to panic. The truth is that a lawsuit can be filed for any reason or no reason at all. Just because someone files and serves a lawsuit does not mean the suit has any merit. Second, contact your attorney and provide him or her with a copy of the summons and all documents contained in the summons as soon as possible. The moment your business is served, the clock starts running on critical deadlines. It may also be advisable to tender the lawsuit to your liability insurance carrier, who may be obligated to provide a defense to the lawsuit under the terms of your insurance policy.
Heather Rooney McBride Forward the documentation with which you were served to your attorney immediately. Every lawsuit has applicable time frames, and delaying addressing it could result in losing the case.
Is it important to read and understand contracts before signing them?
Britton Jobe Yes. Many people never pay attention to the terms of a contract until it is too late. Contracts can contain language that severely restricts your business’s legal rights. This is especially the case in form contracts that may be very one-sided in providing the drafter of the contract with advantageous legal rights at the expense of the non-drafting party. Given the breadth of contracts that your business will encounter, there are too many potential issues to name. An experienced business attorney will know what to look for in a contract, can provide an opinion on your rights and obligations under the contract and may be able to help you negotiate more favorable terms if necessary.
Mike Nichols Absolutely. Regardless of whether you have read it or not, the moment you sign an agreement, you are bound by its terms. Ignorance of the terms is not a defense to the agreement. There is no such thing as a standard agreement. Don’t assume any contract says what a prior, similar agreement said. Unless you are willing to live with the consequences, you need to review and understand the terms of every contract you sign.
Why should I hire an attorney to draft or review my contract when I can get one off the Internet?
Heather Rooney McBride Contracts created on the Internet are not tailored to your particular circumstances and may not even be drafted by an attorney or an attorney who is licensed to practice in your state. This means an internet contract may not be enforceable and could cause more problems than it would help, depending on the circumstances. At my firm, we obtain detailed information about the intended agreement and your goals in order to draft a contract customized to your needs.
Mike Nichols Forms are nothing more than what their names imply: a form. They are a starting point from which the specific terms of a deal or agreement are to be created and inserted to evidence the parties’ agreement. Every deal is different so using a form unedited is almost never sufficient. The next problem is that, unless you’re accustomed to negotiating the specific type of agreement you are contemplating, most people will not appreciate the possible implications of what the form provision means. Take a lease, for example. There are numerous provisions that get negotiated very heavily between landlords and tenants on a routine basis. Depending upon what side of the transaction you are on, you will have differing desires and opinions. Form agreements can’t deal with those situations. You need assistance from an attorney who is used to spotting the issues and negotiating terms acceptable to the client.
Bryan Wade Although there are “boilerplate” contract provisions that should be used in nearly every written contract, not all transactions are the same. There will inevitably be nuances in a transaction that a standard form contract may not address.
How is retaining an attorney more advantageous than using an online legal service or drafting contracts myself?
Mike Nichols The problem with drafting agreements without the help of an attorney is that you are likely not accustomed to negotiating the details of a contract. Businesspeople negotiate deals every day. That is what you do. However, then you need to document those deals in written form to ensure each party lives by its agreement. It is then that the attorney becomes valuable. If the parties ever get in a dispute, the written agreement is the primary —and sometimes exclusive—piece of evidence to prove what the parties agreed to. So, it is critically important to (1) accurately document the agreed terms and (2) thoughtfully consider the details of the agreement. An attorney, through daily negotiation of hundreds of agreements, is going to be more familiar with how deals get sideways and how provisions can affect you in ways that you probably have not considered. By thoroughly negotiating a contract, most disputes and disagreements can be avoided.
Heather Rooney McBride Drafting a contract yourself or using an online legal service often results in an incomplete and, in some cases, an unenforceable document. If the parties do not fully set out the details of the deal and their rights and obligations ahead of time, a dispute can arise. The legal fees spent trying to remedy the situation after it has gone south will far exceed what you would have spent to have an attorney draft a contract for you initially.
For more information contact:
Husch Blackwell, 417.268.4000
Bryan handles a variety of complex matters before judges and juries, including employment disputes, contract and tort claims, stockholder disputes, franchise disputes, professional negligence, civil rights, insurance claims and healthcare litigation matters. Bryan is a member of the firm’s Real Estate, Development & Construction industry team.
Spencer Fane, 417.888.1011
Mike Nichols is a corporate and real estate development partner with Spencer Fane LLP. With 18 years of legal experience, Mike helps business owners and real estate developers navigate the complex and competitive world of business through deal-making, partnerships, mergers and acquisitions, contract negotiation and real estate development.
Heather Rooney McBride
Rooney McBride & Smith, LLC, 417.708.9681
Heather is the founding member of Springfield law firm Rooney McBride & Smith, LLC. She is licensed to practice law in Missouri, Arkansas and Oklahoma, and serves as general counsel for several regional companies based in those states. Heather also routinely appears in southwest Missouri courts on commercial litigation matters.
Neale & Newman, LLP, 417.882.9090
Britton Jobe is a commercial litigation attorney at Neale & Newman, LLP, where he was recently named partner. A graduate of Missouri State University and Creighton University School of Law, Britton has focused on regional economic development as part of his civic and philanthropic activities.