Business Law

The difference between an Oklahoma asset purchase and a stock purchase

Two common agreements that are used in the sale of businesses are:

1. a Stock Purchase Agreement; and

2. an Asset Purchase Agreement.

While there are many similarities between these 2 agreements, there are some fundamental differences.

A Stock Purchase Agreement is used when the buyer is going to purchase all of the owners 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.

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

It is important to note not only the difference between an asset purchase agreement and a stock purchase agreement, but also when to use each type of agreement. If you have any questions about using asset purchase agreements or stock purchase agreements please feel free to contact me, I have worked on many.


Posted by Shawn Roberts in Blogposts, Business Law

The different ways to do business in Oklahoma

Have you ever wondered what the different ways you could do business in Oklahoma?  That is, if you do not want to be a sole proprietor, what the entities you can create to do business through in Oklahoma?

You need to wonder no longer, below is an entity chart which lists each form of business entity and provides a brief description of what the entity is.

Entity Diagram

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

How to file a Trade Name with the Oklahoma Secretary of State

Trade-Name-Report

A trade name is what many people refer to as a “DBA”. That is, any name that you or your business does business under other than the one registered with the Oklahoma Secretary of State. You can find out a bit more about trade names here.

I am going to show you how to register a trade name in Oklahoma. The only cost is the $25.00 fee you pay to the Oklahoma Secretary of State.

Step 1 – Download the Trade Name Report form here.

Step 2 – Trade Name under which the business is carried on. Insert the name which you use or want to use that is different than your business’s legal name.

Step 3 – Address. Insert your business address.

Step 4 – Legal name of the “business entity” doing business under the trade name. A business or person must claim ownership of the trade name. Insert the name of your business or your own name in this blank.

Step 4 – Brief description of the kind of business carried on under the trade name.

Step 5 – Type of business entity. Find the type of entity you have and check the appropriate box.

Step 6 – Signature Block. The choices here are either “Business Entity Acknowledgment” or “Corporation Acknowledgment” If you have a corporation, sign in the “Corporation” section, if you have anything else, including a limited liability company or you are signing as an individual, sign in the “Business Entity” section.

Step 7 – Send in Report. After the Trade Name Report is completed and signed, mail it to the Oklahoma Secretary of state with a check for $25.00. The mailing address for the Oklahoma Secretary of State is:

Business Filing Department
2300 N. Lincoln Blvd., Room 101
Oklahoma City OK 73105-4897

Posted by Shawn Roberts in Blogposts, Business Law

FAQ — How much does it cost to form an Oklahoma corporation?

Broder Canning Company, Lethbridge And Taber Operations

This is one of the questions I hear often, particularly because services like Legal Zoom make so much hay with pricing. So I thought to myself: Why not share my pricing, plus what you actually get for the price?

While this isn’t the price in every case because some cases are different, this scenario covers most situations.

My price for a forming an Oklahoma corporation is typically $800.00. What do you get for this price?

Certificate of Incorporation.    The Certificate of Incorporation contains the basic information about the corporation:  Name, Resident Agent, and the initial directors of the company and are filed with the Oklahoma Secretary of State.

By-laws. The By-laws are the most important document of the corporation.  They govern the management of the corporation, the allocation and distribution of profits, duties of officers, directors and shareholders, voting, procedures for transfers of stock and various tax related matters.  The by-laws can enhance the asset protection features of the corporation, or it can weaken them depending on the provisions.

Meeting Minutes. Meeting Minutes memorialize decisions made by the directors and shareholders of the corporation, both to get the company going and to maintain it each year.

Tax ID & Elections. In most circumstances, a corporation requires a Tax ID Number from the IRS.  Essentially, it is the equivalent of a social security number for the corporation.  Bank accounts should be opened with this Tax ID and all corporate business should be conducted under this Tax ID.

Stock Certificates/Transfer Ledger.   Stock Certificates manifest ownership in the corporation.  A corporation does not have shareholders until shares of stock are issued.  That means that there must be some manifestation of intent to issue the shares of stock, either in the Meeting Minutes or in the signing of the Certificates.

Standard Non-Disclosure Agreement. A fundamental necessity for any company seeking to protect its intellectually property, this battle-tested Non-Disclosure Agreement provides a foundation for protecting private and confidential information.

Standard Employment Agreement. It pays to have it in writing with your employees. This way, both the employer and the employee know what the deal is. You can do this with the Employment Agreement which has been tested and refined in many scenarios.

Standard Independent Contractor Agreement.  Most small businesses use the services of independent contractors.  As with the employment relationship, it is helpful to document the Independent Contractor relationship in writing.  You can achieve this with the simple Independent Contractor Agreement I provide.

Free Telephone Calls. As you get your business up and running, you need some more guidance on legal issues. I am happy to provide some help by talking to you on the telephone for no charge, for the first six months after we set up the company.

Posted by Shawn Roberts in Blogposts, Business Law

How to craft a business email that will surely get you sued

Email is ubiquitous. It is so ingrained in our personal and professional lives that we sometimes forget that email creates a paper trail that never goes away.

Even super-smart people stumble occasionally when dealing with email. In a recent piece on The Verge, a gadget blog, the emails of some of Silicon Valley’s most famous and successful CEOs show that no one is immune.

The emails came out as part of a lawsuit alleging that several technology companies conspired to prevent employees from moving to other companies. EricSchmidt008
Check out this gem from former Google CEO Eric Schmidt:

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You can see the entire collection of email as well as some solid reporting on the issues at The Verge.

This situation brings to mind a few tips for your email writing that will hopefully help you not get sued:

1. If it could be embarrassing, don’t write it.
2. Remember as you type out that email: email, like diamonds, is forever.
3. Send emails only to the people who absolutely have to see them.

Posted by Shawn Roberts in Blogposts, Business Law, Oklahoma Employment Law

How to wind up an Oklahoma limited liability company

In my previous post, I talked about the different ways an Oklahoma limited liability company can end.  Once it has ended, there are several things you need to do to “wind up” up the company.

1. Pay Creditors. Payment, or adequate provision for payment, shall be made to creditors, including to the extent permitted by law, members who are creditors, in satisfaction of liabilities of the limited liability company;

2. Distribution to Members. After creditors are paid, the company can distribute what is left to the members. The first distribution in this category is to members or former members in satisfaction of liabilities for distributions under the Oklahoma Limited Liability Company Act; and then to members and former members first for the return of their contributions and second respecting their membership interests, in proportions in which the members share in distributions.

3. File Articles of Dissolution. Once you have completed the preliminary steps required for winding up the company, you file a document called “Articles of Dissolution” with the Oklahoma Secretary of State.

Posted by Shawn Roberts in Blogposts, Oklahoma limited liability company

When is an Oklahoma limited liability company dissolved?

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Have you ever wondered how an Oklahoma limited liability company dies?

Do you think your company might have already experienced one of those circumstances that would mean death for it?

To dissolve or have a dissolution is simply the legal term for the end of the limited liability company.

The dissolution of an Oklahoma limited liability company happens naturally under Oklahoma law when any of these things happens:

1. A natural death. The LLC reaches the age when its Articles of Organization says that it ends (e.g, the Articles provide for a 50-year life and the LLC reaches 50);

2. A prearranged death. An event happens that the LLC operating agreement says means that the company should dissolve;

3. Everyone agrees it should die. All LLC members agree in writing the company should be dissolved.

4. Death from the Court. An Oklahoma court enters an order that says the company is dissolved.

After an LLC is Dissovled, it is then “wound up”. Winding up an LLC is simply another legal term that means taking the actions necessary to close down the company.

Check back here on Friday for a post explaining how to wind up an Oklahoma limited liability company.

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

5 Questions about the Oklahoma Mechanic’s Lien

A sailor mechanic refueling a plane at the Naval Air Base, Corpus Christi, Texas (LOC)

Have you ever wondered what someone is talking about when they say “mechanics lien”? This question and several more are answered below.

What is an Oklahoma mechanic’s lien Claim?
Although its called a “mechanic’s and materialmen’s lien” it is most commonly used on construction projects. In Oklahoma, liens filed on private property or on funds relating to a public project are known as Mechanic’s & Materialmen’s Lien. When an Oklahoma mechanics lien is filed for work performed on privately owned property, it attaches to and encumbers the fee simple ownership of property. Oklahoma mechanics liens filed for public projects attach to the funds held by the owner. In addition to commercial, residential and public property, Oklahoma mechanics liens can also be filed against oil wells, gas wells, mining property and railroads.

Who can file an Oklahoma mechanic’s lien Claim?
If you provided work or materials to improve property, you might qualify. Contractors, subcontractors, sub-subcontractors and suppliers have Oklahoma mechanics’ lien rights. As long as the supplier furnishes his materials or the subcontractor furnishes his labor under the original contract with the owner, lien rights will attach. Work must be actually performed on a project or material provided to have an Oklahoma mechanics lien.

Fort Stewart, Georgia. Female Auto Mechanic

What is the deadline for filing an Oklahoma mechanic’s lien claim?
For a general contractor (one who has a contract with the property owner), Oklahoma mechanics’ liens on private property must be filed within four (4) months after the date upon which material or equipment was last furnished or performed under the contract. In the case of a subcontractor or a supplier who does not have a contract with an owner, the Oklahoma mechanics lien must be filed within 90 days after the date upon which material or equipment was used on the land or when labor was last performed.

How does filing an Oklahoma mechanic’s lien Claim help me get my money?
The lien makes it virtually impossible for the property to resell or re-finance the property without first removing the mechanics lien. “Removal” usually means payment.

Posted by Shawn Roberts in Blogposts, Business Law

4 things to do after terminating an employee

Are you an employer?  Have you ever terminated an employee or had an employee leave?

If the answer is “yes”, consider this checklist of things to do after terminating an employee:

1⃣.  Pay the final paycheck.  Oklahoma law requires an employee to pay the final paycheck by the date that paychecks would have regularly been paid.  There are substantial penalties if the check is not paid.  No offsets or deductions are allowed from the paycheck unless the employee has agreed in writing to them.

2⃣.  Recover company-owned property.  If the employee has a car, a phone, tools or other equipment, be certain to plan for the return of it prior to the employee’s final departure.

3⃣.  Eliminate security access.  If the employee has access to password-protected websites or any confidential company information, cut-off the employee’s access to reduce the risk of the unauthorized capture of information.

4⃣.  Remove employee as the point of contact.  Often, one employee is the point of contact for goods and services used and purchased by the company.  The vendors that provide these goods and services are familiar with the employee.  Upon the employee’s departure, contact the vendors and make arrangement for a new point of contact.  Sometimes this may require something in writing from the company to the vendor.

Are there other issues you have seen that need to be addressed when an employee leaves?


Posted by Shawn Roberts in Blogposts, Business Law, Oklahoma Employment Law

What does it take to libel or slander someone?

John Barrett & Count Von Bernstorff (LOC)
In the era of instant publishing from anywhere (think Facebook from your phone), it is important to know the kind of statements that might get you in trouble. Yesterday, I explained the difference between libel and slander.

This posts explains what its takes to commit libel or slander because the elements are very similar.

A person who believes they have been libeled or slandered generally need to prove each of the items below to win a claim:

I. a false and defamatory statement,
II. an unprivileged publication to a third party,
III. fault amounting at least to negligence on the part of the publisher, and
IV. either the actionability of the statement irrespective of special damage, per se, or the existence of special damage, per quod.

What does this mean in plainer English?

You say something that is not true and negative about another person, that person is not a politician or public figure, you actually meant to say what you said and the statement is bad enough that people would generally think less of the person.

Although its a bit more complicated than this, you get the gist.


Posted by Shawn Roberts in Blogposts, Business Law