New Jersey Business Lawyers

A business partnership is similar to a sole proprietorship in that it is legally and financially inseparable from its partners. Profits, losses, as well as debts and liabilities pass through the owner’s personal income for tax purposes. They are also simpler and less costly to create than other entities, like corporations. There are two main types of partnerships, including:

• General partnerships: This is a joint business where the partners share responsibility for management and profits. In addition, the partners share all liability for any debts. Before entering into a general partnership, both parties must understand that each partner is liable for all debts associated with the partnership. Also, any individual partner can bind the partnership on contracts. Ultimately, a general partnership is between two or more sole proprietors.
• Limited partnerships: This is similar to a general partnership, however, in this type of partnership, only one partner is required to be the general partner. These are particularly common when business owners need funding or are investing in real estate A written agreement between the general partners and the limited partners is required. Each limited partner makes an initial investment and will likely receive a percentage of the profits. General partners are subject to claims, debts in bankruptcy, and lawsuits, and limited partners can only lose their investment. When entering a limited partnership, individuals are required to file their name, as well as the names and addresses of the general partners with the secretary of state or another designated officer.

When a corporation is formed, it becomes a separate legal entity from its owners. Therefore, liability for debts or damages are limited to the company’s assets. In order to form a corporation, the business owner must obtain state governmental approval to conduct business.

A corporation can sue or be sued and can issue shares of stock in order to increase capital or to start a business. There are two main types of corporations, including S corporations and C corporations. The main difference between the two is the specific taxation structures that apply to each:

• S corporations: These are pass-through taxation entities, which means that they avoid double taxation. S corporations do not pay income tax, instead, the profits and losses are passed-through to the business and filed on the owner’s personal tax return. Ultimately, the S corporation combines the limited liability of the corporation and the single level of taxation associated with a partnership.
• C corporations: These are subject to two levels of taxes, including at the corporate level and again when the profits are distributed among the shareholders. The benefits of a C corporation include no restrictions on ownership or classes of stock, a lower maximum tax rate, and a wider range of options for raising capital.

A limited liability company (LLC) is a legal entity that combines aspects of a corporation and a partnership. It allows business owners to actively participate in the company while protecting them from personal liability for the company’s debts or obligations. An LLC does not require a board of directors to help manage the company.

This is a business that serves some public service, which qualifies it for special tax treatment under the Internal Revenue Code (IRC) and state revenue codes. They are exempt from corporate income taxes on the profits related to the organization’s purpose.

If a company is structured as a nonprofit organization, its directors, officers, and members are protected from personal liability for the company’s debts and liabilities. Board members often play a key role in the company.

Even the most successful businesses are not immune to legal disputes. These can be extremely time-consuming, expensive, and harmful to the business’s reputation if they are not resolved quickly and successfully. A highly skilled New Jersey business lawyer will work closely with their client to understand the nature of the dispute, discuss every legal option available, and develop effective strategies to protect their interests and resolve the matter.

This is one of the most common types of legal business disputes. When one or more parties sign a contract, they are contractually obligated to abide by the terms of the contract. A breach of contract occurs when an individual fails to fulfill their legal obligations. In some cases, the contract may be unclear or contain ambiguities that can cause disagreements.

If one party is owed money for goods and services and the other party refuses to pay because they claim that the goods are defective or not what they expected, the case can become a collection matter. In New Jersey, businesses are limited in how they may collect a debt from a customer. The Fair Debt Collection Practices Act (FDCPA) states that businesses may attempt to collect a debt before pursuing legal action or resorting to litigation.

The FDCPA also includes guidelines regarding the right and wrong way to collect a debt. Examples of prohibited conduct include harassment, annoyance, deceit, abuse, and engaging a customer who has asked to stop communication. A business lawyer who is familiar with the FDCPA will evaluate the strengths and weaknesses of the case and recommend the best legal course of action.

Business owners do not always get along with each other, particularly if they have a different vision for the company or have different management styles. In extreme cases, a major dispute can result in the dissolution of the business. Ideally, the dissolution can be handled amicably. However, when matters cannot be resolved respectfully and fairly, an experienced business lawyer can help resolve the dispute and protect the client’s interests.

This involves corporate entities, individuals, and investment funds that suffered losses involving stocks, bonds, options, and other investments. This may require going through arbitration with the Financial Industry Regulatory Authority (FINRA) in order to resolve the issue.

In the business arena, torts involve wrongful acts that are committed against business entities that result in some type of financial loss. They may be intentional or due to negligence or recklessness.

Some common examples of actions that may qualify as business torts include:

• Malicious interference with business operations.
• Interference with customer relations.
• Cases involving the Racketeer Influenced and Corrupt Organizations (RICO) Act.
• Defamation.
• Misappropriation of trade secrets.
• Slander.
• Securities fraud.

If a business is financially hurt by the negligence or an intentional act of another business or individual, the business owner may be able to seek financial damages by contacting an experienced lawyer.

These disputes may include fraudulent advertising, misappropriation of images, names or likenesses, deceptive business practices, and misappropriation of trade secrets. A dedicated business lawyer will help their client recover lost profits or reasonable royalty payments for the deceptive acts.

These often involve scenarios where a board member or partner engages in some type of behavior or misconduct that hurts the business. Some examples include self-dealing, executive compensation, conflicts between management and ownership, corporate theft, and breach of partnership agreements. Other disputes can occur if minority shareholders are prevented from enjoying financial returns.

Businesses often work with insurance companies and accounting firms to handle those aspects of their business. However, if the people hired to do this work fail to provide the level of care they are legally required to provide, it can hurt the business and its employees. For example, accounting disputes can include overbilling, improper auditing, failure to keep organized records, and failing to file tax returns. Disputes involving insurance agents may include a failure to obtain the requested coverage, selling inadequate coverage, errors that resulted in a cancellation of coverage, failing to advise a business about the limitations of coverage, and submitting inaccurate information on insurance forms.