Partnership Chair
Most of us define a “transaction” as simply buying something from a store. In a larger sense, consider a commercial transaction. A commercial transaction encompasses a wide range of business activities. Whether you are buying a company, looking for tax breaks for your existing company, looking for help with licensing, or many other things, you want a savvy North Carolina business attorney by your side, giving you the benefit of their knowledge of the legal and logistical intricacies common to commercial transactions.
Understanding Commercial Transactions
Businesses are much more than simply selling goods and services. Most businesses need help in many different areas. Commercial transactions can take many different forms (sales, leases, mergers and acquisitions, etc.). Here are some examples:
- Loans for businesses (secured and unsecured)
- Securities offerings
- Tax planning
- Partnerships
- Franchise Agreements
- Licensing of intellectual property
- Stock options and other employee incentives
These transactions can be quite complex and have serious legal implications.
The Role of a Lawyer in Commercial Transactions
There are numerous responsibilities a lawyer can have in a commercial transaction, such as drafting and reviewing contracts, negotiating deals, conducting due diligence, and ensuring regulatory compliance. Most businesses are unique and they require legal help tailored to the individual activities of that business, whether it sees thousands of dollars in revenue monthly, or millions.
Let’s say you want to start your own business. What type of corporate structure is best? Should it be a single-member LLC, multi-member LLC, professional limited liability company (PLLC), or a Series LLC? You need an attorney who understands the pros and cons of each and can help you choose the best one to draft your formation documents and set up required corporate maintenance practices
Perhaps you have a company that will benefit from merging with another company. You need lawyers who know how to negotiate that type of deal to ensure that due diligence happens properly and foresee any potential obstacles to success. The right attorney will be able to advise you about liabilities, tax considerations, and operational matters for your unique business.
There Are Many Risks in Not Engaging a Lawyer in Commercial Transactions
So many things could potentially go wrong in a commercial transaction if you don’t have experienced legal representation, such as non-compliance, questionable contracts, overlooked details, or severe legal consequences.
Let’s say your company buys a smaller company, but it wasn’t disclosed that there are several lawsuits pending against the company you are buying. One is an employment suit alleging a manager sexually harassed his assistant and is seeking millions of dollars. Since your company has assumed all the debts and legal obligations of the smaller company, your company may be on the hook for the legal fees as well as the judgment in that lawsuit, which could send it into bankruptcy. That’s why due diligence is so important. The importance of hiring an attorney to help you with all of your commercial transaction needs cannot be overstated. Laws are constantly changing. You want to protect your company and keep it healthy and thriving, so give us a call today.
