Enhance the Opportunities, Avoid the Obstacles
95% of American businesses are family-owned. Those family-owned American businesses generate 40% of the Gross National Product.
35% of the 500 largest companies in the U.S. are family-owned.
Only 57% of owners of family-controlled businesses intend to transfer the business to family members. Only 30% of family businesses survive into the second generation.
More than 50% of the business owners have more than half of their wealth tied up in their business.
These statistics demonstrate the great business opportunities that can be found in closely held businesses as well as the need for guidance to navigate the inherent pitfalls that can trap the unwary. Lommen Abdo's business attorneys focus on the needs of closely held businesses, including how to avoid legal disputes, how to avoid personal liability, the importance of well drafted buy-sell agreements, the value of thoughtful succession and exit planning, and understanding shareholder disputes or business divorces and how to best resolve them.
A closely held corporation is any corporation whose shares are held by a relatively small number of shareholders. The Minnesota Business Corporation Act defines a closely held corporation as one which does not have more than 35 shareholders. Another popular definition states that a close corporation is a corporation whose shares are not generally traded in the securities market. Most closely held corporations are small to medium-size business enterprises where all shareholders tend to be active in the management of the business. The closely held corporation can provide many of the advantages of including limited liability for shareholders and S corporation election for tax purposes while retaining many of the simplified, less formal operating procedures of sole proprietorships and partnerships.
Closely held businesses often elect to work with law firms rather than hiring an in-house counsel to work within the company. Lommen Abdo brings the expertise of an in-house counsel to its clients; serving as the “outside” general counsel by providing prompt, responsive and cost effective advice on a spectrum of legal needs. For instance, our attorneys provide advice on:
The Tuttle brothers own and operate a third generation family business started by their grandfather: Tuttle’s Bowling Bar & Grill, Elsie’s Restaurant, Bar & Bowling Center and Memory Lanes & Flashback Café.
Tim says, “My brother and I have been in the business our whole lives, but our entertainment centers continue to challenge us every day.” Mike adds that “as our business keeps growing, so do our successes and challenges and, as they do, we have come to rely on our accountant and business lawyer as our trusted advisors.” The brothers engage these advisors to meet short- and long-term business objectives as a team. Dan Young values his role as trusted advisor to the Tuttle’s team, a team that succeeds in the competitive business of entertainment centers. |
- enterprise formation and structure,
- daily operational and governance aspects of the business organization,
- commercial transactions,
- real estate leasing,
- real and personal property financing,
- real estate sales and acquisitions,
- employee compensation issues,
- purchase and sale of business organizations,
- structuring member or shareholder agreements,
- succession and estate planning with respect to business enterprises,
- international ventures,
- individual and business income tax planning, tax-free reorganizations, tax-exempt organizations, tax controversy issues before the Internal Revenue Service and state agencies and other tax matters,
- intellectual property,
- joint ventures and strategic alliances,
- e-commerce,
- funding and negotiation of funding, raising capital and counseling of Boards of Directors,
- mergers and acquisitions,
- emerging and technology businesses,
- shareholder planning and dispute resolution, and
- estate and trust planning and administration.
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Tom Dougherty and Dan Young discuss Closely Held Businesses from Lommen Abdo's Vimeo page.
Closely Held Resources:
- Checklist for Buy-Sell Agreement
- Independent Contractor v. Employee
- Checklist of Factors for Piercing the Corporate Veil
- Business Succession Planning Issues Checklist
- Checklist for Company Sale
- “Risk Management: How to fight ‘dragons’ at private firms,” Tom Dougherty, Upsize Minnesota Magazine, September, 2010
- “Let’s make a deal: Advisers share key advice for business buyers, sellers,” Dan Young, Upsize Minnesota Magazine, August/September 2011
- “Get a legal physical for intangible assets,” Tim Matson, Upsize Minnesota Magazine, June/July 2008
- “Why employers must address networking sites,” Stacey DeKalb and Bryan Feldhaus, Upsize Minnesota Magazine, April/May 2010
We would be pleased to answer any questions you may have about the services of our Closely Held Business attorneys. Any questions may be directed to:
In Minnesota:
Dan Young at 612-336-9343 or
dyoung@lommen.com or Tom Dougherty at 612-336-9330 or
tdougherty@lommen.com
or any of the attorneys in this practice area pictured below.
Additional Information:
Attorneys Greg Perleberg and Jeff O'Brien were featured with clients Mitch Omer and Katy Gerdes, co-owners of Hell's Kitchen/Angel Food Bakery, in the Resource Heroes edition of New Business Minnesota. Read the article.
Lommen Abdo attorneys Bob Abdo, Greg Perleberg and Jeff O’Brien were interviewed on “The Business Forum Show” with Host Kevin Hunter on December 23, 2012. The group discussed the legal issues that face every small business owner including organizational documents and related formation issues, intellectual property, financing and contract issues.
Don't Miss Your Exit Seminar: Exit Strategies & Succession Planning for Owners of Small & Medium Businesses - A crash course sponsored by Lommen Abdo to help you chart your company's value and map out whether to convert your equity into cash or safely pass your company along to co-owners or family.
Lommen Abdo’s 2011 Award Winning Closely Held Business Seminar - Learn how to maximize your opportunities and navigate the inherent obstacles. Gain valuable and practical insight into how to avoid legal disputes, including avoiding personal liability, create effective buy-sell agreements, prepare for succession and exit planning and address shareholder disputes and business divorces. Hear what accountants and bankers have to say about the business landscape today as they share the success and horror stories they see.