I love contracts. Some might even snicker at how excited I get at the possibility of putting a big deal together and using some creative drafting to make sure everyone is happy with the Agreement. Yes, I am a bit of a contract nerd. Contracts are a beautiful thing. The ability for you to strike a deal with another business and have assurances that they will follow through with their promises is a wonderful thing.
But there are a lot of bad contracts and agreements out there. This might sound familiar to you: A business owner signs an agreement to sell machines he manufactures to a customer for 5 years. He is required to build and sell .so many machines per month and the customer will pay him a set price for each machine. In year 3 of the deal, the cost of the business owner’s raw materials drastically increases and if he continues to build and sell the machines under the agreement, he will lose money. How do you get out of a bad business contract? This is just one scenario. There are thousands of other ways to be tied up in a bad contract.
Single-member limited liability companies are very common in Michigan. Most small business owners operate under this type of business entity. Some are even able to navigate the confusing system that the State of Michigan has set up on their own and been able to file their articles of organization and become a registered limited liability company or LLC with the State. So your personal assets are protected now, right?
Ummmm… Maybe. Look here is the deal: A creditor’s attorney is going look for any hole in your business entities shield and try and expose it, and because of that if all you have done is filed a document with the State and paid a filing fee, he is not just say, “Oh well, I guess there is no way this business owner is personally liable” and move on. So what do you need to do to close up those holes? Here are a few DO’s, DON’T’s, and RECOMMENDATIONS.
When starting a West Michigan small business you plan everything out. When trying to grow your small business you put available funds toward advisers such as coaches, marketers, consultants, and branders that allow you to see that growth. When small businesses are planning and growing they don’t consider a customer not paying for an order, a product injuring someone, an employee stealing business from you, or even another business you are working with not following through with their duties. These issues are very common for small businesses and most are taken by surprise when they creep up. So you are involved in a dispute, what do you do?
While most small business owners are very used to wearing multiple hats in the running of the business, the first lesson that should be learned if your small business is involved with a lawsuit is that you cannot represent your company in court. Unless you have passed the Michigan Bar Exam you are not permitted to practice law in the State of Michigan. Going before any court and representing your small business is considered practicing law, so you are going to need to hire a lawyer to represent your business.
Fear is a powerful force. There are people that won't get on elevators, won't fly, or won't get in front of a group and speak. Fear changes our decisions and causes some to go out of their way in order to avoid those situations. Many small business owners are afraid to grow their business. And the funniest part about it is that don't even know they have this fear.
In starting your small business you took a risk. You left the stability of larger established business in which you were an employee in order to start your own thing and do it the right way. You were able to grow your small business to a point that have been able to gain some stability and your business is actually turning a profit. So clearly you don't fear growth, right? Wrong.
Every small business owner loves the idea of expanding their business. Whether they are increasing operations, expanding to a new location or just taking on larger orders, expanding is directly associated with success. While these times can be very exciting and gratifying, there needs to be some considerations before plowing forward with your business’ plans to get bigger.
New Holland Brewery has scaled back its plans to expand from just its Holland location to a second spot in Downtown Grand Rapids. Michigan’s third largest microbrewery is delaying the move because they want to find the right situation before pulling the trigger. New Holland president Brett VanderKamp said that finding the right location and the state’s liquor code, which specifies that microbreweries producing more than 30,000 barrels per year are limited in the number of taprooms they can have, are the two biggest factors. New Holland’s current location is currently trying to complete an expansion and it will be right about that 30,000 barrel mark once complete.
There is a certain type of contract that most people are familiar with but have little knowledge of. In fact many attorneys are not terribly familiar with the non-compete agreement. The non-compete can be a standalone agreement or, as is more common, it can be a clause in a much larger agreement. Regardless of the form that it comes in these agreements are complex and a fine line must be met.
The first thing that must be understood with a non-compete agreement is that these agreements are meant to protect a business. They are not meant to be so intimidating that an employee is stuck working for your business or else. There needs to be a legitimate proprietary interest that the agreement is meant to protect.
We are all tired of hearing about how bad the economy is. It seems that every article we have seen over the past five or six years has included some theme about the down economy and how it impacts our various industries. Some have proven to us that times are tough (as if we didn’t know that), some have told us how to survive, and some have told us how to use it to our advantage. Well as a sign of a new era, West Michigan is entering a time with a new problem.
Somewhere in the neighborhood of 2 million construction jobs were lost when the recession hit. West Michigan was not immune to this and the result was a lot of small construction firms and subcontractors were hit hard and many companies went under or had to cut crews to match the amount of work they had. With other industries like health care, education and multifamily markets coming back, this has trickled down to an uptick in the construction industry in West Michigan. So much so that those small construction firms and subcontractors are being stretched thin because there is so much demand.
The chances are you are very much like most West Michigan small business owners. Cash flow and business development are always on the forefront of your mind. Sometimes money can be tighter than others but through the ebb and flow of the good times and the bad those concerns always remain prevalent to some extent. That is why it is so important to avoid disputes and find alternatives to costly litigation.
Whitehall, Michigan is a small community in Muskegon County near the lakeshore. There is an ongoing dispute over a Wal-Mart store that developers want to put in near US 31. Many local business owners and community members do not want to see the super store spring up in their community. The dispute is still in its infancy period but there is one thing that those fighting the store are discovering: this fight is going to be very costly.