The questions you need to ask when starting an Oklahoma business with another person

There is nothing like the excitement of starting a new business.  Even more so when you have a partner, someone to share the experience with. 

Things are probably never as good as when you are infused with the pure adrenaline of seeing your dreams become reality. 

–BUT–

things happen, businesses fail, and even worse sometimes businesses succeed.  When these events happen often the business is closing, an owner wants to leave, or an owner dies.  The time to sort out these situations and to plan for these situations is while things are good and calm, which means at the businesses’ inception.

Consider these questions when you are starting a business with another person:

  • Are you, as an owner, protected from having the liability of the business seep into your personal assets?
  • What if the business gets sued?
  • What if someone quits or is fired?
  • Do you have the proper type and amount of insurance?
  • How do you buy out the person who has left?
  • How much do you pay the heirs of an owner who has died?
  • How do you determine the value of their interest in the entity?

I help people answer these questions and put processes in place to make these circumstances happen as smoothly as possible.  If you would like to talk about these things, please feel free to reach out to me.

Posted by Shawn Roberts in Blogposts, Business Law, 0 comments

Do you know the elements of an enforceable Oklahoma contract?

It’s one thing to make an Oklahoma “contract” but it is an entirely different and more valuable thing to make an “enforceable Oklahoma contract.”  

So what are the elements of an enforceable Oklahoma contract?  See below:

The Definition

An enforceable Oklahoma contract is . . .

“an agreement to do or not to do a certain thing.”

This is a simple statement but critical if you want to make contracts that are enforceable. Without all the required elements, you can still make contract . . . you just can’t enforce them!

The Elements

The elements of an enforceable Oklahoma contract are:

CAPACITY

Parties capable of contracting.

OFFER

An offer by one party;

ACCEPTANCE

An acceptance by the other party; and

CONSIDERATION

Each party must voluntarily give something of value or promise to give something of value in exchange for what the other gives or promises.

 

That is it. Sounds simple doesn’t it? Yet thousands of court cases in Oklahoma alone has grappled with seemingly simple elements for over 100 years.

 An example

I can promise to pay you $1,000,000.00 in 90 days. You can whole-heartedly accept my promise. When 90 days comes and goes and I don’t pay you the money, do you think you can win a lawsuit against me to recover the money?

Return to top

Posted by Shawn Roberts in Blogposts, Oklahoma Contract Law

What is an Oklahoma Stock Purchase Agreement?

An Oklahoma Stock Purchase Agreement is used when the buyer is going to purchase all of the owner’s interest in the company that owns the business.

For example, if you are buying a restaurant and the restaurant is owned by Smith Corporation, in a stock purchase you would buy all of the outstanding stock of Smith Corporation. By purchasing all of the outstanding stock, you end up stepping into the shoes of the previous owners. That means all assets and liabilities that the previous owners have, you now have except for anything that is expressly excluded in the asset purchase agreement.

Curious about the difference between an Oklahoma Stock Purchase Agreement and an Oklahoma Asset Purchase Agreement?  Check out this post that contains an explanation.

 

Posted by Shawn Roberts in Blogposts, Business Law

What is an Oklahoma Asset Purchase Agreement?

An Oklahoma Asset Purchase Agreement is used when a buyer wants to only purchase specific assets of a business rather than the entire business.

For example, purchasing the restaurant mentioned above through an asset purchase agreement would probably mean purchasing the physical location, the inventory and equipment, goodwill associated with the restaurant, and perhaps other information related to customers. In an asset purchase agreement, the buyer is only responsible for the assets he purchases and the liabilities that come with those assets.

Curious about the difference between an Oklahoma Asset Purchase Agreement and an Oklahoma Stock Purchase Agreement?  Check out this post that contains an explanation.

Posted by Shawn Roberts in Blogposts, Business Law

In case you are curious: The anatomy of an Oklahoma Last Will and Testament

Similar to the way the human body is made up of different parts so too is an Oklahoma Last Will and Testament.  Below is a pictorial tour of the key components of an Oklahoma Last Will and Testament: 

 

Personal Representative

Guardianship Nomination

 

 

Powers of the Personal Representative

 

Intentional Disinheritance

 

Distribution of Property

 

Attestation Clause

This is the clause that makes Will “legal” under Oklahoma law.

 

Self-Proving Affidavit

Posted by Shawn Roberts in Oklahoma Estate Planning

What is an Oklahoma limited liability company operating agreement?

You have probably heard of limited liability companies or LLCs as they are often referred to. 

You may not have heard about the key constitutional document for an Oklahoma LLC: the Operating Agreement.

An operating agreement is an agreement by the members of the LLC as to how the company will be run.  Among other things, the operating agreement controls:

1. Relations among the members as members and between the members and the limited liability company;
2. The rights and duties under the Oklahoma Limited Liability Company Act of a person in the capacity of manager;
3. The activities of the company and the conduct of those activities; and
4. The means and conditions for amending the operating agreement.

Title 18 O.S. section 2012.2

You can think of an LLC operating agreement as the manual for operating your Oklahoma limited liability company.

Posted by Shawn Roberts in Blogposts, Business Law, Oklahoma limited liability company

What are the bylaws for an Oklahoma corporation?

How do the people who run the corporation (directors, officers) figure out what the rules of an Oklahoma corporation are? 

One source of this information is the Oklahoma corporation’s bylaws.  According to Ms. Merriam-Webster, bylaws are defined as “a rule adopted by an organization chiefly for the government of its members and the regulation of its affairs.”

The bylaws are the corporation’s constitutional documents that among other things, may contain provisions relating to the business of the corporation, the conduct of its affairs, and its rights or powers or the rights or powers of its shareholders, directors, officers or employees.  Title 18 O.S. section 2013

Posted by Shawn Roberts in Blogposts, Business Law

The key terms to know in an Oklahoma living trust agreement

To understand an Oklahoma revocable living trust agreement it is helpful to understand some of the key terms and players used in the trust. 

Below are key definitions for the different roles in an Oklahoma revocable living trust agreement:

Settlor
The person who creates the trust agreement.

Trustee
The person or entity who holds legal title to the property that is transferred to the trust.  The Trustee is responsible for managing and administering the trust.

Beneficiary
The person or entity for which the trust holds the property.  A beneficiary might get something when the settlor passes away or the beneficiary might get a steady flow of income from the trust.

Trust Protector
“A trust protector can be an individual or a group of individuals that is not the settlor, beneficiary, or trustee. Their role occurs in a directed trust. The trust protector’s role, in essence, is to supervise the trustee. ”  Link to the definition.

Trustee advisor
“Means a person appointed by the terms of the trust instrument to act as an advisor to the trustee with regard to all or some of the matters relating to the property of the trust. Unless otherwise provided by the terms of the trust instrument, if a trustee advisor is appointed, the property and management of the trust and the exercise of all powers and discretionary acts exercisable by the trustee remain vested in the trustee as fully and effectively as if an advisor were not appointed, the trustee is not required to follow the advice of the trustee advisor, and the trustee advisor is not liable as or considered to be a trustee of the trust or a fiduciary when acting as an advisor to the trust.”  Link to the definition.

Principal
“Means any real or personal property which has been so set aside or limited by the owner thereof, or a person thereto, legally empowered that it and any substitutions for it are eventually to be conveyed, delivered, or paid to a person, while the return therefrom, or use thereof, or any part of such return or use is in the meantime to be taken or received by or held for accumulation for the same or another person.” Link to the definition.

 

Posted by Shawn Roberts in Blogposts, Oklahoma Estate Planning

Vivid Imagery: The Flow of an Oklahoma Lawsuit

To most people the Oklahoma Court system is a mysterious and complicated place with only “insiders” such as attorneys and judges to understand it.  

The diagram below shows the flow of an Oklahoma lawsuit until it completion in a trial conducted by either a Judge or a Jury.  

This diagram obviously won’t remove all the mystery of the system but hopefully it provides you with a better big picture understanding of the Oklahoma Court system.

 

Posted by Shawn Roberts in Business Law

What is an Oklahoma Buy-Sell Agreement?

You may have heard the term “buy-sell agreement” or maybe the term “Shareholders Agreement.” 

These terms essentially describe the same thing:

An agreement between the people that own a business (either Oklahoma corporation or limited liability company) about how the ownership interest (either shares of stock and units of an LLC) is going to be handled if an owner leaves the business.  An owner may leave a business either voluntarily (think no longer interested in the business, has a better opportunity) or involuntarily (think death or disability).

The buy-sell agreement provides a structure for valuing the ownership interest in the business and then transferring ownership of the interests when a person leaves the company.  If you are interested in reading more about why a buy-sell agreement is critical for Oklahoma businesses, check out the post 3 reasons you need a buy-sell agreement for your Oklahoma small business.

Posted by Shawn Roberts in Blogposts, Business Law