Category: Business Law

Play by the rules

From the desk of Attorney Crump-Gibson… Your property abuts an alley between your business and a residential neighborhood. You decide that you want to erect a wrought iron fence to separate your property. All you have to do is to secure the contractor, make payment and move forward, right? Not so fast. Every municipality has

Weed Woes…?

Last week, Detroiters voted to pass two ordinances that lessen the restrictions on medical marijuana dispensaries in the City. The vote comes well over a year after City Council passed a largely restrictive ordinance that ultimately led to the closure of 167 facilities. The voters have spoken, and their word will stand- at least for

Signs of the times…

You have leased a new building for your business. One of your tasks is selecting a new business sign for opening. There are a few LED and Digital options that are attractive to you. You plan to select the sign and have it installed by week’s end. That easy, right? Not so fast. Every municipality

The “Born” identity: Assumed Names

Do you want to abbreviate your company name on your advertising materials? Do you want to transact business under another name without forming a new entity? Both are feasible under Michigan law, but you must make sure to follow the right steps! First, the law requires that you file a Certificate of Assumed Name for

DO your DUE diligence…

Jim has an amazing idea to start a new housing project. His only problem is he doesn’t have the capital. He thinks of Fred, a longtime friend who doesn’t have much business experience but has a lot of money and owns some property. He sits down with Fred and convinces him that a generous cash

The way out…

It has been a while since we have discussed the importance of the “business prenup”. With life always comes change. So, we want to take the opportunity to revisit. Do you know what will happen to your business if your partner leaves the business or passes away? What about if you become disabled? Most business

Fight for your (voting) rights!

Partnering up on a business venture? There are quite a few matters you should be sure about before you ink the deal. One of those is how voting is covered. Is it one man, one vote? Is it in accordance with percentage of membership interest? Do you have a majority? This is HIGHLY relevant as

All in the same boat…

We have discussed the importance of all business organizations having governing documents, i.e. an operating agreement, partnership agreement, bylaws/ shareholder agreement, etc. One of the most common issues we run into is owners of single-member LLC’s failing to have an operating agreement. Most assume “I own the business alone- why do I need something like

Permits, Licenses and Certificates…Oh My!

You are finally ready to open up shop. You have found a great location for your business, have a draft lease from the landlord to review and anticipate moving in shortly! There is a little bit of work to do on the space but you don’t anticipate it taking long at all. In fact, you

Agreeing to Disagree: The Danger of the “Side Agreement”

Throughout the ordinary course of business, small business owners regularly enter into a variety of agreements with third parties, including vendors, employees, consultants and service providers. More often than we like, we come across owners who contract a third party, reduce an agreement to writing BUT also agree to some sort of verbal side deal

Risky Business

When is the last time you reviewed your employee handbook? If you reviewed it, did you consider any recent state and federal developments that impact employment policies? Often, small business owners take a long moment before answering these questions. It is so easy to get bogged down in the day-to-day of running a business, that

It’s 2017 Annual Statement time!

This week’s tip is a reminder to all limited liability companies and professional limited liability companies. Your annual statements and reports must be filed with the Corporations Division of the Department of Licensing and Regulatory Affairs by this Wednesday, February 15, 2017. Please be sure to timely submit your filings so that your business remains

You don’t have to touch the stove to know that it’s hot!

It’s that monster rearing its ugly head again: employee misclassification. We have discussed this problematic concept before and constantly caution our clients to avoid it at all costs. Studies show that an estimated 3.4 million employees are classified as independent contractors, when they should be reported as employees. In 2009, it was reported that misclassification

Small Business Matters: Eyes Wide “Shut”

We often discuss the dangers of small business owners unwittingly neglecting important matters that can ultimately make or break their businesses. Many business owners have tunnel vision when it comes to driving the bottom line. When this happens, they run the risk of missing an exit and detouring to hazardous terrain. For this week’s tip,

All’s well that ends well

Thinking about launching that business with a partner? Or is there already an existing business that you have been offered ownership in? Either way, one of the most important documents you will need is a Buy-Sell Agreement. Affectionately termed a Business Will or Business Prenup, this document (or sometimes a section within a larger legal

Deal or no deal?

You’ve been given an opportunity to partner with four other people in a growing venture. The venture is operated by a Manager-Managed LLC. You only know one of the members, who is not one of the appointed managers. If you put up $5,000 in cash, sweat equity drawing on your expertise and sign the operating

Tis’ the season- Make your list and check it twice!!

Business owners!! It’s that time again! Now that you are nearing the end of another year, it’s time to take a look at your records and assess what needs work. There are certain records that are industry and business-entity specific, but there are some records that EVERY business should maintain properly: organizational documents, accounting and

Dodging the bullets…

Did you know the most common lawsuits filed against small businesses are employment related? Most times these suits center on claims of wrongful termination or discrimination. So, what if anything, can you do to dodge these bullets? The reality is that there is no foolproof plan. There is nothing that will give you an absolute

Square peg in a round hole: undervaluing Human Resources

One of the biggest mistakes you can make in running your business is hiring someone to run Human Resources- that does not KNOW Human Resources. We have seen far too many times owners of closely-held businesses hire a friend or someone a friend recommends that is good with “paperwork” and is “really organized” to handle

Myth Busters: Small Business Edition

One of the most misunderstood concepts we hear about from entrepreneurs is the “S-Corp” as it relates to limited liability companies (LLCs). We often hear business owners seeking to file paperwork to form an “S-Corp as opposed to an LLC” because the LLC is not best for them. Let’s bust this myth. In this scenario,

Sharing may not be so caring: the danger of borrowing contract templates

When you’re a small business owner, budgeting is everything. You try to keep costs down and save as much as you possibly can. What business owners MUST remember is that cost cannot always be measured in dollars alone. Some decisions you make on the front end can actually be costlier on the back end. There

“Mission Drift”: Losing Your Grip!!!

It is relatively common for a 501(c)(3) nonprofit organization to unintentionally drift away from its mission. This concept is referred to as “Mission Drift”. There are a number of signs that reveal an organization is suffering from this problem, including: large turnover of board members and/ or staff; obscurity as to what your organization’s mission

Stuck like chuck: How to avoid deadlocks in operating agreements!

Deadlocking is a standstill resulting from two opposing forces. The potential for this issue to arise is quite prevalent with two-member LLCs; namely, the members of the LLC are in disagreement with the other’s decision. If the matter is significant enough, business operations can come to a complete halt. Whenever possible, deadlocking should be avoided.

Why your co-owned business needs a prenup: Buy-Sell Agreements

Do you know what will happen to your business if your partner leaves or passes away? What about if you become disabled? Most business owners cannot definitively answer this question because they do not have a “business prenup” or “business will”- more formally known as a Buy-Sell Agreement. A Buy-Sell Agreement includes provisions for death,

Interviewing Practices: Mum’s the word!

A number of our small business clients are growing. With growth comes the need to hire more staff. Quite some time ago, we published a tip on interviewing practices- we thought it would be important to recirculate it in light of this growth spike. Take a look below! You may have a pretty good handle

Small business owners CAN access affordable help!

Don’t find yourself caught up with tough legal issues trying to do it yourself! C&G regularly works with small businesses owners to address their needs. Cost is not always measured in dollars! “As attorney Alan Hall put it when asked what message he’d like to send to small business owners everywhere: “How much is your

LLC Owners: Stay in your sandbox- do not use the Company’s assets as your playground!

Piercing the Corporate Veil… Owners of LLCs are known as “members”. Generally, a member of a Michigan LLC is not liable for the acts, debts or obligations of the Company unless otherwise provided by law or an operating agreement. The Company acts as a shield or a “veil” to protect the members. This is great

Proposed Government Contractor Whistleblower Practices Rule may create more problems than solutions!

Take a look at this piece we came across regarding a proposed Government Contractor Whistleblower Practices Rule that may create more problems than solutions! On January 22, several government administrations proposed an amendment to the Federal Acquisition Regulation that would forbid the government from spending money on businesses or nonprofits who require employees or subcontractors

LLCs and PLLCs: Have you filed your annual statement yet????

ONE of the most important things businesses must do is make sure to stay current on all licensing, reporting and certification requirements. Can you guess the most common renewal we see business owners miss? The annual report with the State of Michigan- the very report that is required by law to keep your business in

When the Honeymoon is over: Being Proactive in Handling Partner Disputes

Whether it’s your brother, best pal from college or a like-minded entrepreneur you met at a conference, you will eventually have a disagreement with your business partner. Most of the squabbles may be small but there may come a time when a big issue arises and your dispute over it threatens the operations of your

Better SAFE than SORRY: Why you need a solid Document Retention Policy

Customer Smith called you to get a copy of his purchase orders from the month before last before he places his next large order. Can you quickly retrieve and send them to him? You’re in the middle of a lawsuit with a bitter former employee and are asked to provide the employee’s disciplinary reports from

Solo to the party? You still need your tickets and ID!

Single-Member LLCs: Why you need an operating agreement You started your own business. You formed an LLC and have no other members or what are ordinarily known as “partners”. You don’t need to waste your time with an operating agreement, right? WRONG! Let’s first talk about what an operating agreement is. An operating agreement is

Santa has come and gone, but YOU should be making your list and checking it twice!

Last week, we talked about “out with the old, in with the new”. We received feedback in high volumes from business owners. The overarching message was “I know there are some things I could take a look at- but where would I even start??” Small businesses are notorious for failing to keep proper records. It

First employee MISCLASSIFICATION, now employee RECLASSIFICATION!

Check out this piece we came across where yet ANOTHER employer improperly classified an employee as an independent contractor! But here’s the catch- the employee was properly classified until he went on medical leave, only to later find out that his classification was changed without his knowledge –resulting in a total loss of his healthcare

RECAP: Attorney Crump-Gibson on entrepreneurship, small businesses and legal counsel

We have had quite a few consultations with budding entrepreneurs recently. Back at the beginning of the year, Attorney Crump-Gibson was interviewed by Crain’s Detroit blogger/ columnist Mark S. Lee regarding her path to entrepreneurship and some helpful tips for small business owners. It’s a great time to share these tidbits again, with those thinking

Business owners…Join us at “The Top Ten”!!!

Whether you are an emerging entrepreneur and need new information or you are an existing business owner and need a refresher…”The Top Ten” is the seminar for YOU! We will be covering legal basics – the “top ten” facts that every business owner MUST know!! Do not miss this opportunity!! Light refreshments will be served.

Business Interruption Insurance: Think you don’t need it? Think again!

There are several different types of insurance that business owners should have. One of the increasingly popular types of coverage is business interruption insurance- sometimes known as business income insurance. Some owners neglect to obtain this type of policy because of cost, while other owners may think the property or casualty insurance coverage they maintain

Long lease terms: do you really want to commit??

Business owners must proceed with caution when entering into commercial leases. Along with a number of other concerns to tackle prior to entering into a commercial lease, the length tops the list. Most landlords will push for longer lease commitments, but you have to know when to push back! Depending on the specific needs of

Outside investors: Just because it makes dollars DOESN’T mean it makes sense!

You have a great business concept and decided to start your business BUT you find yourself in dire need of funding. The best thing to do is to hook that potential investor you were chatting up and get the cash, right? WRONG! This decision has serious implications. First, any investor at minimum will want input

Ignorance is NOT bliss!

“How can I be responsible for that??? I didn’t even know!!!!!” These are words that cause us to wince in pain when we hear them! Why?? Because ignorance of the law is NEVER an excuse- no matter what! Just because you are not familiar with a particular area of law does not mean it does

FAIL to document? Then PLAN for court!

Take a look at this recent U.S. Court of Appeals-8th Circuit case, where a two-member LLC wound up in court fighting over money because of failing to properly document transactions and maintain adequate records. Here, a successful real estate development company found itself underwater and unable to make ends meet. Mr. Robl, the member owning

PLLCs: Birds of a feather MUST flock together

Professional Service limited liability companies or PLLCs are limited liability companies comprised of individuals who have been legally authorized to provide a professional service. Some professions that MUST form as a PLLC (and not just a regular LLC/ limited liability company) include attorneys, accountants, doctors of divinity or other clergy, dentists and physicians. For single

Check out this piece on changes to Michigan’s Nonprofit Corporation Act!!!

Take a look at this article detailing the recent changes to the Nonprofit Corporation Act. The amendments were made to reflect current nonprofit practices and also make the Act more closely parallel to the State’s Business Corporations Act. One of the new provisions expands nonprofit directors’ indemnification to include paid directors and protects all directors

Register for our exclusive Small Business Workshop today!!

C&G Solutions presents “Business Skills”: A Workshop for Start-ups and Existing Businesses. This workshop is a MUST, whether you are interested in starting a business or already in operation! Hosted in the heart of downtown Detroit at the historic Fort Shelby Doubletree Hilton, this is something you do NOT want to miss! We have top

Business Owners!! Beware of improper conduct!!

Check out this recent Michigan Court of Appeals case where the court found that a limited liability company, along with some of its “executives” were guilty of member oppression, self-dealing and related improper conduct concerning distribution of proceeds from the sale of the company! Courts take the mishandling of funds and improper conduct of a

Potential employee misclassification rears its ugly head again!!

Back in January, we published a “Tip of the Week” explaining the importance of properly classifying workers as independent contractors vs. employees. As we explained, Michigan courts (along with the IRS) have developed a very specific test with several factors to determine Contractor v. Employee status. Take a look at this recent U.S. Court of

GOP intends to cut MEDC funding…what does this mean for businesses?

Check out this article on Republican lawmakers’ plans to cut the budget of the state agency responsible for awarding incentives to companies that hire new workers and expand facilities in Michigan. The Michigan Economic Development Corp uses the funding to help subsidize job creation efforts. According to the GOP, these cuts are necessary to balance

Cover your bases!!!

Cover your bases!!! Why liability insurance is a MUST for businesses… A lot of business owners feel as though they cannot afford liability insurance. The truth is, while it can sometimes be expensive, you can’t afford NOT to have it. What happens if you are the victim of theft? Not insured? Who’s going to pay

Arena development advancing in Detroit…what does this mean for the local business community?

Read up on the updates to the original rezoning requests made to Detroit City Council by Olympia Development to make way for the new Red Wings arena and surrounding development. This new development brings a number of issues to light. What does this mean for new prospective business opportunities and existing adjacent businesses? Contact C&G

Watch out for legal formalities that come with your choice of business structure!

Take a look at this recent U.S. Court of Appeals-6th Circuit case, where a board of directors takes heat for failing to comply with legal notice requirements. The shareholders sued the board and won! The board failed to disclose specifics about an important proposal in a required notice for an upcoming board meeting. Why is

Entrepreneurship and the need for legal counsel- check out what C&G has to say in Crain’s!

C&G’s Founder Jehan Crump-Gibson was recently interviewed about entrepreneurship and the importance of small businesses having legal counsel. Click here to check it out!

Living VICARIOUSLY through others…literally!

Living VICARIOUSLY through others…literally! You CAN be liable for the actions of your employees- no matter what type of business you own! Whether you have a restaurant, cleaning service, sell life insurance or offer financial advice…your employees can expose you to liability under the legal theory of “Respondeat Superior” or VICARIOUS LIABILITY! The Latin term

Put it in writing! The Formality = The Reality

Put it in writing!!! The Formality = The Reality “A man’s word is as good as the paper it’s written on” Hiring a new printing company for your sales brochures? Ordering more product? What about engaging a virtual assistant or having the electrical system in your office repaired? Put the terms in writing! While oral

To incorporate or to not incorporate… that IS the question!

C&G’s Tip of the week: Corporations and Limited Liability Companies To “incorporate” or not to “incorporate”? That IS the question! Finally launching your t-shirt line? What about your consulting business? KNOW the benefits of incorporating and make a sound decision on how to structure your business. Do not become comfortable with the “DBA”! Whether you

Personal Guarantee: Using one’s personal credit to help build business credit. Proceed with Caution!!

Business Owners and Entrepreneurs: Understand all the risks and rewards from having to sign a Personal Guarantee! It is common for owners of new companies to be asked to sign a personal guarantee for anyone extending “credit”. Landlords, Suppliers, Financial Institutions and any other sources that may extend credit to your business may ask you

Independent Contractor or Employee.. Do you know the difference?

Independent Contractor or Employee… Do you know the difference? Employee misclassification is a problem that hurts everyone! It happens when an employer hires a worker and erroneously classifies that person as an “independent contractor” instead of an “employee”. Often times, employers that make this misclassification think that they can simply issue an “IRS Form 1099”

Michigan Court of Appeals affirms probate court’s decision: Partnership’s dairy farm does not belong to the partnership!

State Bar of Michigan E-Journal #57852 In re Estate of Mark E. Moon (Unpublished) “[This] case involved “a prolonged dispute between appellant and appellee regarding whether certain property belongs in decedent’s estate. Decedent and his father, appellee, ran a dairy farm together. During the course of these proceedings, it was determined that the two of

Business Court Legislation Signed Into Law

On October 16, 2012, Governor Snyder signed HB 5128, now Public Act 333 of 2012, into law. The Act establishes business courts in the State of Michigan circuit courts. These courts will have jurisdiction over business and commercial cases in which the amount in controversy exceeds $25,000. Beginning January 1, 2013, the seventeen circuit courts

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