A lawyer has passed the bar exam and is licensed to practice law in a particular jurisdiction. A legal secretary, on the other hand, has yet to pass the bar exam and cannot represent clients in court.
Family-owned businesses can face unique challenges. From family conflict to nepotism claims, these issues can impact the growth and stability of the company.
1. Taxes
Many family businesses face unique tax challenges that can be more complex than traditional businesses. Among these issues are separating personal and business assets, maintaining an accurate account of transactions, and ensuring compliance with laws. An experienced attorney can help.
In addition, the informal structure and culture found in many family businesses can contribute to a lack of documentation, policies and defined strategies. This can be problematic regarding succession planning and passing ownership down the line.
In addition, it is important to comply with employment laws and avoid discrimination based on race, age, national origin, sex or religion. Overlooking or dismissing these laws can result in fines or other penalties. A family business lawyer near me can help to ensure that all employees, including nonfamily members, are treated fairly. One way to do this is to pay employees the market rate for their position. This can create an environment of transparency and encourage employee loyalty. It can also help to reduce the risk of disputes. An attorney can help to develop effective policies and provide legal advice.
2. Disputes
Family businesses often face legal disputes in addition to financial issues. Conflicts can be caused by disagreements over the direction of the company, how profits and assets are divided or who should be in charge. The complication of emotions and personal relationships makes these disputes difficult to resolve without outside help.
A family lawyer can help with this challenge by establishing clear lines of responsibility and implementing policies to avoid nepotism. Nepotism is when a family member receives benefits, such as jobs or promotions because they are related to the owner. This can cause conflicts of interest and lead to nonfamily employees leaving the company.
It is also important for a family business to be aware of employment laws and ensure that all family members comply with them. This can include laws regarding discrimination, harassment, wage and hour issues and ERISA requirements for pension plans. Protecting the family business’ intellectual property, including patents and trademarks, is also essential. Failure to do so could result in other companies using the company’s ideas and inventions without its permission.
3. Contracts
Contracts are the basis for any business, and family businesses are no exception. Family members may disagree on how profits or ownership stakes should be divided or who should take over leadership when the founder retires or dies. Without a proper plan, such disagreements can quickly escalate and lead to legal disputes that threaten the success of the business and damage family relations.
A family lawyer can help by negotiating and drafting agreements that limit how, when and to whom the ownership interest in the company may be sold. Having well-drafted contracts is also important when hiring outsiders because it can help prevent future legal disputes about employment issues.
Similarly, non-compete and non-solicitation agreements are often necessary for family-owned businesses that rely on their employees’ confidential information and special skills. These arrangements are usually enforceable, but they require special scrutiny because courts can view them as restrictive covenants. In addition, many states have stringent background check requirements for employees in certain industries and locations. Taking care of these details early can save time and money in the long run.
4. Employee Relations
Hiring family members has its perks, including knowing them and the fact that they likely share similar upbringings and experiences. But, the downside is that they can often become overbearing and take on disproportionate amounts of management authority. This can create a toxic workplace that can negatively impact nonfamily employees.
Additionally, family members may not be held to the same standards as other employees regarding performance reviews and terminations. The danger is that this could lead to resentment among nonfamily employees who see their advancements delayed or outright blocked.
Nonfamily employees also have the same rights to be paid market value for their work, and a family business must develop compensation policies that comply with employment laws. This includes federal and state wage and hour laws (including minimum wage, overtime, child labor and record-keeping), discrimination laws and noncompetition and nonsolicitation agreements. A lawyer can help a family business develop and enforce these policies. We also have experience defending employers against claims of discrimination, harassment, retaliation and other workplace-related torts.
5. Estate Planning
When a family business hires family members, additional risks include nepotism, inadequate background checks and unclear expectations. These issues can quickly escalate into legal disputes that are challenging to resolve without outside help. A lawyer can provide impartial advice and help resolve disputes before they become too heated or emotional.
Estate planning is preparing documents that determine what happens to an individual’s property during their lifetime and after death. This can include creating trusts, reducing taxes and ensuring that assets are distributed according to an individual’s wishes.
When a family business owner wants to retire or sell their company, they must have a clear plan to ensure that their business will continue operating as the owner intended or be sold at the highest value. This can be difficult if there is no existing agreement or legal document to support the desired outcome of the ownership transition. A lawyer can assist with this process by creating a legal document to protect the interests of each party involved.
Conclusion
In conclusion, family businesses often face unique legal challenges that can impact their long-term success and stability. From succession planning to employment law issues, navigating the complex legal landscape can be overwhelming for business owners. However, by working with a knowledgeable lawyer who specializes in family business law, owners can ensure they are complying with all relevant regulations and protecting their interests.
A skilled lawyer can provide guidance on succession planning, help resolve conflicts among family members, and assist with any legal disputes that may arise. By seeking professional legal advice, family businesses can minimize risks and maximize their chances of thriving for generations to come. Don’t hesitate to consult a lawyer today and safeguard your family business’s future.
