What are Golden Parachute Payments? The phrase “golden parachute” refers to an agreement between a company and a high ranking executive which calls for the executive to receive a large predetermined amount of compensation in the event there is a

Bankruptcy is the process by which a business that is insolvent may eliminate or modify its existing obligations.   Corporate bankruptcy means any bankruptcy entered into by an entity organized as a corporation, a limited liability company, partnership, limited liability partnership

What is a Partnership? A partnership is a business entity formed by two or more people who operate a business for profit as co-owners.  For the purposes of creating a partnership, a “person” is any entity with its own legal

What is a Limited Liability Partnership? A Limited Liability Partnership (“LLP”) is a partnership in which the partners are not personally liable for the debts of the partnership or other partners.  Unlike a limited partnership, all partners in a LLP

A Not-For-Profit Corporation Is Not Automatically a Tax Exempt Organization. There is often confusion between a not-for-profit corporation and a tax exempt organization.  They are not necessarily one in the same.  A not-for-profit corporation is organized under the law of

What is a Professional Corporation? A professional corporation (“P.C.”) is a business entity formed under special state statutes which allow people that would otherwise not be able to organize as corporations to receive most of the benefits of the corporate

What is a Corporation? A corporation is a business organization which is chartered by a state (known as the state of incorporation) in accordance with the state’s incorporation statute.  In the eyes of the law, a corporation is a separate

Generally Arbitration Agreements Are Enforceable When faced with the question of whether or not to enforce an agreement to arbitrate, American courts routinely uphold the vast majority of arbitration clauses.  The legal basis for upholding contractual arbitration clauses is the Federal

In certain situations, shareholders may find it advantageous to enter into agreements with other shareholders regarding how the company should be run or who will run the company.  These agreements, known as “shareholder agreements” or sometimes “vote pooling agreements” or

Sales warranties are guarantees that sellers make to people who purchase goods from them.  The sales warranty rules apply only to the sale of “goods,” that is, tangible items.  Sales warranties do not apply to sales of services or property. 

Any business that produces a physical product faces potential liability if the product turns out to be defective.  Additionally, any business that uses a defective product may have a cause of action against the producer and/or seller of the defective

Any business that owns real estate of any kind can be faced with the issue of whether or not the business is liable for injuries a person receives while on the business’ property.  Although most business owners think of premises

What is the Sarbanes-Oxley Act? The Sarbanes-Oxley Act of 2002, also known as “SOA” or “SOX” is a congressional act with established a series of laws aimed at improving corporate governance, reducing corporate fraud, and eliminating deceptive accounting practice.  The

What is Insider Trading? Insider trading is the trading of a corporation’s securities, such as stock, bonds, or stock options, by people who have access to non-public information about the company.  Although generally thought of as criminal, certain types of

A fraudulent conveyance, also called a fraudulent transfer, is a transaction where one party (“Transferor”) gives or sells for less than full value an asset to another party (“Transferee”), leaving the Transferor without sufficient assets to pay his obligations.  An

Expenses incurred entertaining customers, clients, and employees are often deductible under 26 U.S.C. § 274.  Because the rules are quite detailed and contain a collection of exceptions and specific treatments of specific forms of entertainment, including foreign travel, conventions, and

Owners of companies are always looking for creative ways to compensate and retain essential employees, while simultaneously retaining complete control and ownership. Phantom stock, sometimes referred to as “shadow stock”, is a fairly popular mechanism to tie compensation for employees