Due Diligence When Buying a Business

Regardless of whether you are a serial business owner or you are looking at becoming a business owner for the first time, engaging in due diligence will be a key factor in whether or not the business succeeds. That’s because the success of a current business is often dependent, as a starting point, on the information you received prior to actually purchasing the business. Due diligence requires, at a minimum that you review several years’ worth of tax returns, profit and loss statements, balance sheets, and current leases and contracts, including employment contracts, insurance policies, review federal and state taxes, UCC...

17 September

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The Personal Guarantee of a Business Owner

Posted by Evon Spangler

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Hypothetical: Jordan owns Jordan’s Delights, Inc. She has been in business for 5 successful years. However, after thinking about her options, Jordan decides she wants to expand her business. She believes that the expansion of the business is a wise financial decision. Jordan’s Delights, Inc. is approved for an SBA loan, which requires Jordan to sign a personal guarantee. In addition, when Jordan goes to the landlord to request additional space, the landlord agrees to a new lease for the expanded space (with increased rent). The new lease with the expanded space is in Jordan’s name as that is how...

04 September

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Cyber Policies

Posted by Evon Spangler

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As a business owner, it is essential that you have written policies and procedures regarding providing confidential private information, such as payroll information in response to a request (which usually is submitted via e-mail), even in what appears to be from an internal e-mail. For example, cyber criminals now are masking themselves as the firm’s owner/CEO and sending an e-mail to payroll asking for a copy of W-2s for everyone for an audit. Replying to that e-mail with the W-2s just compromised all of your employees’ information. So, you need to establish “checks and balances” before sending out confidential or...

14 August

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Updating Contracts

Posted by Evon Spangler

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Once a contract has been finalized it is important that you do not continue to use the same contract year-in and year-out without having it updated. The law is continually changing, and as a result, your “excellent” contract from five years ago could be completely or mostly outdated today. Or your “excellent” contract from five years ago could be missing key laws that have been passed since the contract was originally drafted. It is extremely important to have your contracts reviewed each year by an attorney. Not only does the law generally change in a year’s time, but your contract could...

16 July

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Sick/Safe Time Ordinances in Saint Paul and Minneapolis

Posted by Evon Spangler

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Contrary to popular belief, the Minnesota legislature did not pass a law that disallowed cities, such as Saint Paul and Minneapolis, from passing its own laws related to sick and safe time. As a result, effective July 1, 2017, your business had to cover sick/safe time for your employees as required under the ordinances. It is important to analyze each ordinance separately as it relates to your business as the ordinances, while having several similarities are also vastly different. For example, the Saint Paul ordinance covers every business that has one or more employees the same. On the other hand, under...

25 June

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The Death of a Business Owner: The Importance of Buy-Sell Agreements

Posted by Evon Spangler

in Uncategorized

Hypothetical: Betty and her sister Amy are equal owners of Betty’s Things, Inc. They have been in business for 10 years, and their business is going well despite the fact that Amy’s husband does not like Betty. Amy's husband does not like Betty because he believes that his wife was entitled to more money from the business than Amy has received. Amy unexpectedly dies in a car accident. Betty contacts an attorney because Amy’s husband called her demanding that the business is dissolved and that Amy’s estate receives two-thirds of the business assets. To add insult, Betty’s Things, Inc. is...

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