Corporate & Business Law

At Lex Nova Law, our business is helping your business succeed and grow. No matter your industry or business, our corporate and business lawyers have decades of experience delivering results that improve bottom lines while positioning our clients for even greater success in the future.

Our corporate and business lawyers bring to every matter decades of experience and a knowledge base that is both broad and deep. We represent:

• Startup Businesses
• Privately-Held Companies
• Family-Owned Businesses
• National and Global Enterprises
• Investors
• Boards of Directors and Board Members
• Executives
• Shareholders

Our integrated, team-based approach allows us to deliver results at a fraction of the cost of our much larger peers. Among the transactions we handle regularly:

• Buying and selling businesses, including asset, stock, and direct or indirect sales and acquisitions;
• Executive compensation issues, including negotiating and drafting executive employment agreements and navigating related complex tax, securities, and financial regulation-related matters;
• Forming and structuring a new business, including assistance with choosing a business entity, registering the business with the appropriate federal and state agencies, and building an effective internal legal infrastructure that limits liability and taxes while aligning incentives among owners and key stakeholders;
• Financing transactions, including debt, equity, tax-credit and alternative financing transactions that provide much-needed capital to help a business grow;
• Negotiating, documenting, and, to the extent required, mediating and resolving, partner buyouts, including both amicable and hostile transition situations;
• Structuring shareholder relationships, including buy-sell agreements, shareholder agreements, and other similar agreements that balance the economic, tax, and control rights of each shareholder and the company;
• Securities offerings and fund formation transactions, including capital raising transactions utilizing both modern techniques such as Crowdfunding (both Regulation CF and Regulation A) and traditional approaches (under Regulation D);
• Ensuring our clients’ compliance with various federal, state, and local government authorities in areas such as tax, securities, finance, and real estate development;
• Business succession planning, including the successful and efficient dissolution and winding up of businesses as needed;
• Employment-related matters, including hiring, firing, and retaining employees, and protecting and defending a company against potential lawsuits and other liabilities; and
• Corporate governance and management-related issues, including advising on corporate governance best-practices and defending against or preventing liability related to breaches of fiduciary duties and shareholder derivative lawsuits.

Business Formation

Our business and corporate lawyers have formed thousands of businesses. With that experience, we can guide you through every facet of forming your business, to make sure you’re starting with a strong legal foundation. Our services include:

• Helping choose the right form of legal entity – limited liability company, C corporation, S corporation, limited partnership, or something else;
• Choosing and ensuring legal protection for your business name;
• Filing the right forms with the IRS and every state where you do business;
• Choosing the most tax-effective structure for your business;
• Selecting a form of business that offers the most protection from personal liability;
• Selecting an entity, a jurisdiction, and a capital structure most favorable to investors;
• Drafting an agreement with your partners;
• Awarding key contributors with equity-based or equity-flavored incentive plans;
• Protecting your business goodwill with appropriately structured non-compete, non-solicitation, and non-disclosure agreements.

Family-Owned Businesses

We believe strongly in the family-owned business as a mechanism to pass values and wealth from generation to generation. At the same time, we understand that while blood is thicker than water, the strains of working under the same roof can test the bonds that hold families together. We represent many family-owned businesses and understand their unique dynamics. We are especially attuned to the tax, business, and personal dynamics at play in succession planning – the delicate process whereby the older generation hands the reins of the business to the next in line.

Family-owned businesses are like any other businesses, but different. Often, the voice of an experienced and trusted counselor can provide great benefits to family members facing the unique challenges they face.

Cross-Border Transactions

We regularly advise foreign investors and businesses seeking to establish a presence in the U.S. Our sophisticated tax, legal, and business experience – all in one source – is a valuable aid to those new to the country or hoping to take advantage of favorable tax and business planning.  Many of our clients purchase investments or businesses overseas.  While we are not admitted to practice in foreign jurisdictions, we have experience with the kinds of issues that arise and working with other in-country legal advisers.

Contracts

Contracts set the rules for business relationships. Good contracts allow those relationships to evolve and flourish, anticipating and resolving possible disagreements before they happen.

“Good contract” doesn’t have to mean “long contract.” A good contract should be appropriate for the circumstances and not bogged down with legalese. At the end of the day, our goal is to capture the terms of the deal, ensure that you and your business are adequately protected, and provide transparency to the transaction so that all parties understand their rights and responsibilities.

Our business and corporate lawyers have prepared successful contracts in dozens and dozens of industries, addressing all manner of business relationships. Among them:

• Corporate Capitalization and Control Agreements
• Phantom Stock Plans
• Partnership, Shareholder, and Operating Agreements
• Asset and Stock Purchase Agreements
• Agreements of Corporate Reorganization
• Incentive Stock Option Plans
• Patent and Copyright Licensing Agreements
• Executive Employment and Compensation Agreements
• Confidentiality Agreements
• Joint Venture Agreements
• Management Agreements
• Supply Agreements
• Redemption Agreements
• Franchise Agreements
• Investor Rights Agreements

Corporate Governance

The laws governing business entities have evolved a long way since “control” meant owning 51% of the stock.

Today’s corporate laws, especially in forward-thinking states like Delaware, allow for a virtually unlimited number of governance structures. The 99% owner can have total control or no control; a Board of Directors of six individuals can be controlled by one of them or five; special interests (for example, business founders or investors) may be given special control rights; one group of managers can have control over some aspects of the business while another group has control over others.

Our business and corporate lawyers help design the right governance structure for your business.

Personal Liability of Management

In our litigious society, it’s important to protect yourself and your management team from frivolous claims. Our corporate and business lawyers know how to take full advantage of modern corporate laws providing protection from personal liability. If drafted properly, for example, the limited liability company agreement of a Delaware limited liability company may disclaim all fiduciary obligations on the part of managers. We can draft contracts that use these laws as they were intended to be used, while also treating investors and third parties fairly.

Mergers and Acquisitions

In one sense selling a business is the foundation of our capitalist system:  the seller/entrepreneur reaps the rewards for her success and moves on to the next business while the buyer adds rocket fuel to the company’s existing operations, resulting in accelerated growth, increased innovation, and greater wealth.

We handle all types of merger & acquisition transactions – among them asset purchases, stock purchases, equity swaps, and tax-free reorganizations – for companies large and small, in every industry, in the U.S. and across borders. Lex Nova corporate and business lawyers have handled a purchase of control shares where the purchase price was $400,000 and a cash sale where the  purchase price was $450 million.

Many lawyers handle business sales, but from Term Sheet to Closing and Post-Closing, Lex Nova lawyers bring to bear decades of M&A experience and a multi-disciplinary approach to achieve the most favorable results for our clients. For example:

• We help structure the transaction to achieve the most favorable after-tax outcome;
• We understand which representations and warranties are more important and which are less;
• We have extensive experience addressing the special challenges of M&A involving public companies;
• We understand liability carveouts and limited guaranties;
• We address the special challenges of earn-outs and other purchase price adjustments;
• We work closely with accountants to address financial issues;
• We deal with post-closing employment of principals and associated compensation;
• We use holdbacks and escrows to address special liability situations; and
• We work quickly and efficiently, providing an extremely attractive value proposition for our clients.

Some representative transactions:

• Represented an international pharmaceutical company in a highly-competitive Section 363 auction sale leading to the $450 million acquisition of Graceway Pharmaceuticals, LLC;
• Represented a bike manufacturer in its merger with the largest retailer of bicycles in the United States in a transaction valued at more than $400 million;
• Served as New Jersey counsel in a $435 million public company cash out merger transaction;
• Represented large financial institution in its acquisition of several significant community and national banks; and
• Represented a biopharmaceutical company with several significant diabetes candidates and a novel technology platform in its sale to Fortune 500 multinational pharmaceutical corporation.

Family Offices

At Lex Nova, we understand what it means to build generational wealth and to use it to advance both public and private ends. Our award-winning attorneys have been recognized by such outlets as Best Lawyers in America, Martindale-Hubbell, SmartCEO Magazine, Worth Magazine, and SuperLawyers for our demonstrated track record of helping families plan for, build, and manage success over generations. We can and do help to:

• Developing asset-protection and wealth management strategies that simultaneously protect our client’s wealth while minimizing tax liability and other administration costs;
• Make investments in a variety of private companies and projects, including advising on various deal structures, investments, and terms while ensuring their rights are properly protected from down-side risk;
• Manage charitable contributions to ensure maximum impact and minimizing tax liabilities, including establishing various charitable enterprises such as private foundations, nonprofit corporations, and other related activities; and
• Implement wealth transfer strategies that minimize tax liabilities and ensure that a family’s wealth is protected for generations to come.

Business Divorce

Business partnerships begin and business partnerships end. Like a divorce between husband and wife, the ending of a business partnership can range from friendly to bitter. Only lawyers win in a bitter business divorce. The business itself usually suffers, not to mention the lifelong personal relationships.

Our business and corporate lawyers can help you plan for and navigate the end of a business partnership, whether that takes the form of a buyout, a separation of one business into two, or some other form. We will represent you forcefully in litigation if necessary, as forcefully as the situation calls for. For most clients, however, a friendlier separation is better. With deep knowledge of the laws and deep experience structuring creative solutions, we can help.

Shareholder, Partnership, and LLC Agreements

Without exception or exaggeration, creating a good agreement among the owners of the business is the most important task for the owners and their lawyer. The time to create it is right away, as the business is being formed.

We have seen far too many businesses and relationships ruined for lack of a good agreement. You are family members or lifelong friends who are sure nothing could go wrong? Think again. Courts are filled with bitter fights among former friends and family members who thought just as you are thinking now.

Here are some key questions our business and corporate lawyers will help you address:

• Ownership Percentages: Ownership percentages, the manner in which profits will be divided, and the power to control the business are three separate things. A good agreement deals with these issues separately.
• Capital Contributions: A good agreement will establish how much money each owner will contribute, both at the outset and in the future, and lay out the consequences if an owner fails to contribute his, her, or its share.
• Distribution Waterfall: Ownership percentages don’t necessarily dictate how profits are distributed. For example, maybe the owner who contributed capital should get her money back first.
• Management and Control: Without a clear agreement, the owners of a business can find themselves arguing over control. Should all decisions require unanimous consent? Should decisions be made by the majority, with only designated major decisions (g., selling the business) requiring the vote of the minority? Most important of all, can two owners fire the third?
• Breaking Deadlocks: Of all the things that can happen to a business, the worst is a deadlock. A good agreement gives the owners a way out, without lawyers and judges involved.
• Compensation: Profits are one thing, compensation is something completely different. In most businesses, the owners should be compensated for what they do.
• Time Commitment: Many businesses start as a side gig in the garage, with the owners working part time. They should write down how much they expect one another to work.
• Restrictions on Competition: How would you feel if your partner left and opened shop across the street? A good agreement balances the interests of the individuals and the business.
• Buy-Sell Issues: Too many agreements focus only on the death of an owner. Far more likely during a five-year business horizon is that an owner becomes disabled, is divorced, becomes insolvent, or just quits and heads to the beach. A good agreement covers all these possibilities.

Talking about these issues can be uncomfortable – that’s because they’re so important. We have talked about these issues many, many times before and can help you create a good, lasting business agreement.

Franchising

One of the most successful ways to begin a new business is with the help and guidance of a franchisor with a proven formula for success.  We have reviewed many, many franchise disclosure packages and assisted prospective franchises to negotiate the Franchise Agreement and understand the implications and importance of it provisions.  Will you have an exclusive territory?  Will you be required to purchase supplies from the franchisor at a burdensome markup? Can you monetize your successful business by selling it to a successor franchisee? Can you renew? Are there hidden costs?

In theory, franchises provide a way for entrepreneurs to launch new businesses using a proven model. In practice, too many franchise arrangements are more like employment relationships where the employee provides the risk capital – or even like indentured servitude. We can help you distinguish the good from the bad.