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Letter of Intent – The First Step to Buying a Texas Business

Letter of Intent – The First Step to Buying a Texas Business

The letter of intent outlines the purchase of a business. The letter provides a summary of the terms and guides the deal after the letter is signed. If you are considering purchasing a business in Texas, contact Tim Sutherland so the firm can guide you through the steps from start to finish. We can protect your interests and make sure the deal is done right. You need an attorney to review a proposed letter of interest from the seller or broker as these are often one sided and not favorable to the buyer. You probably don’t know what to look for and in fact each deal is unique due to the nature of the specific business and the seller and buyer. If you are the buyer and drafting the letter…
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CONSIDERATIONS FOR SETTING UP A TEXAS LIMITED LIABILITY COMPANY

CONSIDERATIONS FOR SETTING UP A TEXAS LIMITED LIABILITY COMPANY

While I always recommend hiring a lawyer to organize a Texas start-up, a few considerations merit mentioning whether you are heading into a consultation to begin working with an attorney and even if you decide to do it yourself. If you are operating or considering a Texas LLC in Houston or Austin, contact me by email to set up a consultation about the requirements and best practices for setting up the business and doing business with the public in a way that minimizes risk to you and your business. I draft Articles of Organization, Operating Agreements, and handle intellectual property and employment matters (employees, independent contractors, freelancers). I also draft custom contracts for your business including terms and conditions. DECIDE ON A NAME FOR YOUR TEXAS LLC THAT ISN’T TRADEMARKED OR IN USE…
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STARTING A TEXAS FOOD BUSINESS

STARTING A TEXAS FOOD BUSINESS

Food service establishments such as restaurants and food trucks (mobile food units and food carts) are heavily regulated with permitting requirements, registrations, and random inspections (and inevitable fines) by the health department. There is an exception to these requirements which pertain to smaller-scale Texas food businesses. By law, a person can produce food in their own home kitchen to be sold directly to customers. In Texas (and in every State but New Jersey), you can operate a home-based food business based on the  “Texas Cottage Food Laws.”  If you are operating or considering a start-up food business, contact me by email to set up a consultation about the specifics of the food laws and best practices for setting up the business and doing business with the public in a way that minimizes risk to you…
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WHAT IS A LETTER OF INTENT AND HOW IS IT DIFFERENT FROM AN ASSET PURCHASE AGREEMENT

WHAT IS A LETTER OF INTENT AND HOW IS IT DIFFERENT FROM AN ASSET PURCHASE AGREEMENT

When purchasing a business in Texas, a letter of intent is a first step to putting some of the discussed terms in writing in order to move forward with the process. At this early phase, not all of the terms have been discussed or agreed. Potentially, the price is discussed but contingent on the results of due diligence to substantiate the value requested from the seller of the business. A LETTER OF INTEREST DOES NOT MEAN THE DEAL IS DONE. It is still very possible that the seller is shopping the business to other buyers, just as it is possible that the buyer is also considering other businesses. The LOI can include provisions for exclusivity, and depending on the parties this may be a negotiated term in order to proceed with…
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BUYING A BUSINESS IN TEXAS

BUYING A BUSINESS IN TEXAS

4 TIPS FOR BUYING AN EXISTING BUSINESS IN TEXAS Every deal is different, reach out to Tim Sutherland on the contact page if you are looking into purchasing a business and want to discuss the steps involved and the process. Working with a Texas business attorney can save you money in the future from headaches that can be avoided and ensure the deal goes as smoothly as possible. 1. HAVE THE SELLER AGREE TO EXCLUSIVITY WHILE NEGOTIATIONS ARE ONGOING If you are negotiating, you don’t want the seller shopping around. While initial negotiations are progressing, negotiate a window and have a signed agreement in place to allow time to make the right deal. You don’t want to be rushed or pressured with a hard sell and the seller claiming there is another…
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ATTORNEY’S FEES PROVISIONS IN CONTRACTS

ATTORNEY’S FEES PROVISIONS IN CONTRACTS

If you are reviewing or drafting a contract, one thing to consider is attorney’s fees. The general rule is that each side pays its own fees. For (oral or written) contract cases, a party may be able to recover its reasonable and necessary attorney’s fees. Texas has a statute which governs so long as a party prevails on the claims for breach and recovers damages (money). If the parties negotiate a written contract, they should take care to consider how attorney’s fees should be handled if there is a lawsuit if the deal goes south. THE PARTIES CAN DECIDE THE REQUIREMENTS FOR RECOVERY OF ATTORNEY’S FEES The parties to a contract can provide for either stricter or looser requirements for the recovery of fees. For example, maybe you don’t recover any money…
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EVEN A SINGLE MEMBER LLC SHOULD HAVE AN OPERATING AGREEMENT

EVEN A SINGLE MEMBER LLC SHOULD HAVE AN OPERATING AGREEMENT

When clients ask me whether they should go ahead and get an Operating Agreement, I always say ‘yes’ even when I am forming a single-member LLC. Before you go accusing me of an upsell or add-on, I have my own reasons and I will lay them out below. If you’d like to speak with me about your business and my thoughts on what kind of Operating Agreement is right for you, send me a quick email from the Contact Us page and we can set up a time to talk. First, let’s get a basic definition of an Operating Agreement.  It is essentially, at its most basic level, a contract signed between all of the members of the LLC agreeing how the company will be run, including management structure, member authority,…
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AN ASSUMED NAME IN TEXAS IS NOT A TRADEMARK OR A BUSINESS ENTITY

AN ASSUMED NAME IN TEXAS IS NOT A TRADEMARK OR A BUSINESS ENTITY

A TEXAS ASSUMED NAME GIVES THE PUBLIC A WAY TO FIND OUT WHO OWNS THE BUSINESS. An assumed name is a way to notify the public who they are doing business with when an individual or a company is doing business under a name other than the individual’s name or the entity name. The assumed name is likely more brandable than an entity name, especially in the situation of a sole proprietor. In the event someone needs to contact the true owner of a business, including for a lawsuit such as a personal injury or intellectual property issue, they can look up the owner who is using an assumed name. HOW TO FILE AN ASSUMED NAME. An assumed name is filed with the county clerk where you are doing business…
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WHY YOU NEED TO TRADEMARK YOUR BUSINESS NAME

WHY YOU NEED TO TRADEMARK YOUR BUSINESS NAME

WHY YOU NEED TO PROTECT YOUR BUSINESS WITH A TRADEMARK. People often associate the term trademark by way of naming examples of famous marks. These marks identify the source of the goods such as McDonalds (and their use of “Mc_____(everything)”. This means a couple of key things. First, the seller controls the reputation of the business so that another business which is named in a similar manner does not damage the reputation by providing goods or services of poor quality. Another key issue is to prevent another business from using your name to promote their business. Essentially, this is called trading off of your business or palming off goods in such a way that one business rides the coattails of another well known business and makes sales due to deception of…
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QUESTIONS TO ASK WHEN BUYING A TEXAS BUSINESS

WHY DID THE SELLER PUT THE BUSINESS ON THE MARKET? There can be many reasons a business owner wants to exit, such as: health; family; market or demand changing for the business; commonly the owner is worn out or in need of a change of scenery. If you know the reason, perhaps this can allow you room to negotiate the price. Does the owner need to get out from under the business asap? If so, this may help you acquire a business at a price well under market value. Does the owner desperately need funds for some reason (bills, another business, retirement, family, new purchase)? If so, perhaps this helps you negotiate a favorable all cash offer. IS THE SELLER SPEAKING TO MULTIPLE INTERESTED SERIOUS BUYERS? If the seller is…
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