The Arbitration Process: How Do I Get My Award? Part 1: Obtaining the Award

HNW Business and Corporate Legal Services, Business Law

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Arbitration Law Attorney If you are an avid fan of crime shows or Law & Order, or turn on the television to hear about the latest sensational case, you might be surprised to find out that most cases that come into the courts are often settled out of the courtroom, whether it is through mediation, or in some cases, arbitration.  Many companies make you sign agreements requiring you to submit any dispute with the company to binding arbitration instead of suing in court.  One of the biggest reasons companies do this is that arbitration is cheaper than using the courts, and often times produces a faster result …

LLCs vs. Corporations- Economic Differences Part 2

HNW Business and Corporate Legal Services, Business Law

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Business Corporate Attorney  In our last post, I discussed the differences between LLCs and Corporations as it relates to management and operation.  We saw how an LLC allowed its members and managers more flexibility in its operation and allowed its member owners to avoid some of the more enjoyable responsibilities and duties imposed on directors or officers in a corporation.   Today, we will discuss the economics of both types of entities, including how each gets taxed. One of the biggest differences between the company types is how you can transfer ownership of the company.  With a corporation, (unless there is a shareholder’s agreement), ownership interests can be …

What Should I Select? LLCs vs. Corporations- Management and Formation Differences (PART 1)

HNW Business and Corporate Legal Services, Business Law

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Business Corporate Attorney  If you are reading this article, it probably means that you are looking to form a business.  You have this awesome idea, whether it is to sell the next greatest gadget, open up a local dry cleaning business, or anything in between.  One of the first questions you probably have is what type of business should you open.  You might be hearing a lot about limited liability companies, also known as “LLCs.”  80% of entities formed in New Jersey are LLCs.  Why?  Because if a lawsuit occurs, your personal liability is limited to what you put into the company, as compared to a sole …

Seeking Injunctive Relief From the Court When a Lawsuit is About to Be Filed

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By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Freehold, NJ Business & Corporate Litigation Law Firm When seeking injunctive relief (an injunction means putting “a halt” to the claimed offensive conduct of the defendant), time is often limited and a strategic decision regarding the claims to be made have to be made quickly. The following guidelines should be considered when understanding the analysis. The Chancery Division of the New Jersey Superior Court offers judges and court personnel highly experienced in handling complaints for injunctive relief. The Chancery Division of each county has an assigned general equity judge thereby offering greater predictability with respect to judicial assignments. In a recent case, the state’s Appellate Division lowered the standard for successfully …

THE BENEFITS OF INCORPORATION UNDER NJ LAW

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By Fredrick P. Niemann, Esq. of Hanlon Niemann, a Mercer County NJ Corporation Attorney A corporation under NJ law is a distinct legal entity that can own property, borrow money, pay taxes, hire employees, operate a business, sue or be sued. By law it is the shareholders who are the owners of the corporation. Corporate profits are distributed through the payment of dividends and share price appreciation.  Shareholders are not personally liable for the actions of the corporation. The most significant benefit of incorporation in the state is the limited liability available to its shareholders.  Under NJ law, a corporation is considered to be a separate legal entity from the shareholders who own it. This means that the individual shareholders …

OPPRESSED SHAREHOLDERS IN NEW JERSEY

HNW Business and Corporate Legal Services, Business Law

By Fredrick P. Niemann, Esq. a New Jersey Corporation Attorney In cases of shareholder oppression, the people who own the majority of the shares of a company take some sort of action to harm the minority of shareholders.  This can be resolved through a legal procedure called an oppression remedy. If you have been frozen out of a company, or abused, or treated unfairly in any way, then the law is on your side.  If this is the case, then you are eligible to have your case heard in a court of law, which allows for litigation.  Thus, an experienced attorney can help you determine whether or not you have a case to bring to court. In the state of …

Corporation Not Entitled to Hide Behind Indemnification Agreement Between Shareholders

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By Fredrick P. Niemann, Esq., a NJ Corporate Attorney  Sometimes shareholders of New Jersey Corporation may agree to an indemnification agreement, an indemnification agreement is where one shareholder promises to pay all liabilities of the other shareholder with respect to the corporation. In these instances, if the corporation incurs a debt, it will be the one shareholder’s responsibility to pay the debt, regardless of the fact that he is not the only one who owns a piece of the company.  The NJ Courts recently heard a case involving such an agreement. The only two shareholders of the NJ Corporation agreed to an indemnification agreement, making one shareholder solely responsible for all money owed by the business. When the corporation dissolved, …

Installation of a Complex Computer System Not Considered a Transaction That Falls Under The Consumer Fraud Act

HNW Business and Corporate Legal Services, Business Law, Fraudulent Transfer Litigation

By Fredrick P. Niemann, Esq., a NJ Consumer Fraud Attorney   The Consumer Fraud Act (CFA) provides protection for many NJ consumers when dealing with the sales of real estate and merchandise. The Act provides broad protections for both individuals and corporations involved in these two types of sales, allowing them to bring claims against fraud perpetrators when other types of claims may fail. However, it is important to note that the Consumer Fraud Act, while covering a large number of consumer contracts, does not cover every single contract entered into by corporations. New Jersey Courts were recently called upon to determine whether or not the Consumer Fraud Act applied to a complex installation of a computer software system. The …

MAJORITY OWNERS OF NEW JERSEY LLCS OWE FIDUCIARY DUTY OF LOYALTY TO OTHERS IN THE BUSINESS

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By Fredrick P. Niemann, Esq. a New Jersey LLC Attorney   Limited Liability Companies have become increasingly popular in New Jersey throughout the last decade. This is often the preferred business form for the majority of business owners throughout not only New Jersey, but the entire country. Many of these companies have multiple owners that have a say in the direction, transactions, and other matters concerning the business. While many LLCs operate smoothly and have owners that always agree on company matters, there are undoubtedly numerous LLCs that have owners who simply cannot agree on business decisions. In these companies, the power structure is determined by who owns the most shares or the largest piece of the company. Obviously, the person …

THE FIDUCIARY DUTY OF LOYALTY PROTECTS MINORITY SHAREHOLDERS IN NJ CORPORATIONS

HNW Business and Corporate Legal Services, Business Law, Shareholder Rights Litigation

By Fredrick P. Niemann, Esq., a NJ Corporate Attorney   New Jersey is home to numerous “Closely-Held” corporations, or corporations consisting of a small number of shareholders or owners. Many times, these corporations encompass family members or close friends who have gone into business together. While everyone would like to think that nothing could ever go wrong with their closely-held corporation, trouble does arise and shareholders do find themselves disagreeing with others on certain business decisions. The final call in these decisions ultimately is left up to the majority shareholder, since they own the most shares in the business. It does not follow however, that majority shareholders may make decisions for their own benefit and at the expense of the …