Have I Been Oppressed by the Majority Shareholders?
Minority shareholders in small, closely held corporations (under 25 shareholders) can be frozen out of discussions regarding the company’s future by the majority shareholders, …
Piercing the Corporate Veil – When Could It Happen?
Normally, as an owner or shareholder of a corporation, LLC, or partnership, you are not personally liable for the actions for the entity. The …
Income Derived from Personal Businesses Must Be Counted for Eligibility for Benefits
When applying for welfare through a county’s Board of Social Services, whether it’s Medicaid or SNAP benefits, you are required to provide to the …
Is There a Legal Remedy to a Minority Shareholder Without a Finding of Shareholder Oppression?
I’ve written extensively about minority shareholder oppression. Sometimes there is abusive and unfair conduct by a co-shareholder(s) that do(es) not legally qualify as shareholder …
Seven Ways You Can Legally Terminate an LLC in New Jersey
Like a corporation, a limited liability company (LLC) can be terminated either voluntarily or involuntarily with or without the assistance of the courts. When …
How Can Trademark Rights Protect and Strengthen My Brand?
If I operate a business, do I automatically have a trademark? What is the little circled “R” on certain brand names? What does it …
Can an Employer Sue Its Employee for Negligence?
One of our corporate clients had an employee whose negligence resulted in him cutting electric lines to mobile homes, costing the company $3,500.00 to …
Understanding the Nature of Limited Liability Companies Under New Jersey Law
A limited liability company is no longer a new creation in business organizations law. The LLC was originally designed to answer the need for …
Be Careful When You Personally Guarantee a Contract
A contractual guarantee agreement means if a contract is breached and payment not made, the person who guaranteed the contract can be held personally …
Your Reason for Signing a Contract Can’t Be Used Against You
“Every contract in New Jersey contains an implied covenant of good faith and fair dealing.” “The party claiming a breach of the covenant of …
Shareholder Agreements Protect Minority Shareholders From Oppressive Conduct – Price/Book Value
Most commonly, Buy-Sell agreements provide for a purchase of shares based on book value. Book value is the difference in value between the assets …
Shareholder Agreements Protect Minority Shareholders From Oppressive Conduct – Buy-Out Mechanisms and Their Limitations
The most useful mechanism in a shareholder agreement for dealing with shareholder oppression is a well-written Buy-Sell provision. Because shareholders in closely-held corporations have …
Shareholder Agreements Protect Minority Shareholders From Oppressive Conduct – Required Dividends
The most straight-forward way of protecting a minority shareholder’s economic stake in a closely-held corporation is to require the payment of dividends. In most …
Shareholder Agreements Protect Minority Shareholders From Oppressive Conduct – Employment Agreements
A primary claim for shareholder oppression is termination of employment. “A minority shareholder’s loss of employment within a closely held corporation can be particularly …
Shareholder Agreements Protect Minority Shareholders From Oppressive Conduct – Adopting the Supermajority Voting Requirement
A strategy for providing some minority shareholder control is to alter the voting requirements for specific decisions to require supermajorities — either on the …
Shareholder Agreements Protect Minority Shareholders From Oppressive Conduct – Establishing Classes of Shares to Protecting Minority Shareholders
A tool for maintaining a minority shareholder’s ability to have some control over the corporation is to issue different classes or series of shares …
Shareholder Agreements Protect Minority Shareholders From Oppressive Conduct – Voting Agreements
Shareholders may bind themselves in a shareholder agreement to vote in a specified manner regarding specific matters. Examples might include places on the board …
Shareholder Agreements Protect Minority Shareholders From Oppressive Conduct – Cumulative Voting
Cumulative voting is a mechanism for granting minority shareholders rights of participation to corporate decisions. However, this protection is quite limited and may, at …
Shareholder Agreements Protect Minority Shareholders From Oppressive Conduct – Guaranteed Directorships to a Minority Member
Minority shareholders usually do not have the voting power to guaranty a spot on the board of directors. A shareholder who is not a …
Shareholder Agreements Can Address Specific Oppressive Conduct and Their Limitations
Minority shareholders in a closely-held corporation may (should) try to protect themselves against the actions of the majority by including protective provisions in their …
Once You Agree to Settle a Lawsuit, New Jersey Law Will Not Let You Back Out of the Settlement
In many (most cases/lawsuits) the parties settle their dispute. There is strong public policy favoring settlement of litigation. Once a case is settled, New …
Recent NJ Cases Involving Shareholder Agreements Offer Much Guidance to Counsel and Clients – Part 2 of 2
Facts of the Case This case involved a closely-held corporation with four equal shareholders, in which three of the shareholders ceased paying salary to …
Recent NJ Cases Involving Shareholder Agreements Offer Much Guidance to Counsel and Clients – Part 1 of 2
Case 1 I’ve written often about the importance of having legal disputes resolved by the courts in NJ. Our law states that “Subject to …
Knowing Your Options for Getting Out of a Business with a Member You Are Not Getting Along With
The first, and in my opinion, best option is for you to formally withdraw from the LLC. If you do not have a written …
Corporations Located Outside NJ Can Still Be Sued in New Jersey, Sometimes
In order to exercise jurisdiction over an out-of-state corporation, “a defendant’s “conduct” must create a substantial connection with New Jersey. When analyzing a defendant’s …
Suspect Infringement of Your Business Trade Name? Take Action Now!
If you have gone through the effort of undertaking a United States Patent Trade Office (USPTO) filing, confirmed your company holds the registration to …
New Jersey’s Business Courts: Litigation Program
The New Jersey Supreme Court implemented a statewide Complex Business Litigation Program, the purpose of which was to address the specific needs of parties …
The Enforcement of Restrictive Covenants in Commercial Leases
Restrictive covenants prohibiting competition by tenants in a shopping center can be enforced in New Jersey. This article discusses when and when not a …
You Don’t Lose Your Status as a Partner if You Assign Your Partnership Interest to Your Revocable Trust
Four dentists formed a partnership to acquire and maintain a dental office building. The then-partners amended their agreement to allow one of the partners …
Qualifying for the “Business Court”
Did you know New Jersey has a business court dedicated exclusively to commercial, construction, business and corporation cases? To qualify, your attorney must designate …