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Houston Business & Commercial Law Blog

Privately held corporations: understanding the basics

The right to choose the type of incorporation process of privately held corporations is usually given to the corporation itself or its managers and board of directors. Texas law provides various forms of internal business models that may be incorporated in order to run the company on a daily basis.

Many companies consult professional legal help in order to facilitate incorporation of privately held corporations. In the past, many privately held corporations were criticized for the way in which they executed manager-run policies. The corporations used to allegedly make policies that benefited the managers of the company and were detrimental to the shareholders, especially the minority shareholders.

Resolving contract disputes through legal measures

Any dispute or litigation that may arise in a corporation, whether between two entities or between employers and employees, may form parts of a contract dispute. The attorneys at Manfred Sternberg & Associates, P.C., have decades of experience addressing such contract disputes and defending the rights of the parties in lawsuits.

Breaching a contract is one of the most common grounds for business litigation and contract disputes. In cases where an employer or a business owner is sued for a contract breach, seeking legal guidance to understand your rights and options is one of the first things most businesses prefer to do. With more than a quarter of a century's experience in contacts disputes, our firm has litigated a diverse caseload.

What is the procedure for applying for a merger in Texas?

Mergers refer to the merging of two corporations after which the two corporate entities exist as one. Texas, being home to many corporate giants, is no stranger to such mergers and acquisitions. Specific laws and statutes have been established in order to make sure that such business mergers are conducted in an appropriate manner.

There is a large amount of paperwork that must be filed with the state secretary in order to initiate a merger procedure. The Texas business organization code has established all of the rules and regulations in order to initiate a merger procedure in the state. While most types of mergers are covered under the statutory rules and regulations of the code, there are some forms of mergers that may be kept under the code's radar.

Congress addresses patent trolls

Intellectual property disputes are one of the most fought cases in Texas corporate and business law sectors. Many companies in the state have unique products that may have received patents. In some cases, other competitors may violate the patent rights of the former company in order to make a profit.

Intellectual property disputes plague many big corporations in Texas. The rampant litigations due to patent infringement call for attention from the authorities. Congress has now started discussing the matter at length due to the plethora of business litigation cases that have drained the resources in the State in the last couple of years.

Mergers and acquisitions require a good business lawyer

Texas has quite a few progressive business statutes which allow business owners immense flexibility when planning and structuring a business. Mergers and acquisitions are more often than not complex business transactions requiring experienced legal guidance. A merger or an acquisition can be structured in multiple ways, each having the same result but possibly affecting shareholders and creditors of the existing companies in different ways. A good business lawyer primarily will explain the pros and cons of each structure available.

After finalizing structure, a lawyer can help frame and flesh out the primary document which will state the terms of merger or acquisition, such as mode for transfer of shares, change in shareholding patterns and composition of management. Additional documents specifying mode of consolidation of assets and employees of the involved parties may be needed as well as outlining the conditions necessary for each party to fulfil to make the merger legally effective. Such conditions generally include acquiring regulatory approvals, paying of pending taxes and executing documents transferring assets.

Understanding the Texas Business Opportunity Act

With the expansion of the Internet, an array of new business concepts have emerged from around the world offering easy ways to make money. Like other Americans, Texans have been victims of phony schemes that offer lucrative business opportunities. To protect consumers from being duped, Texas has enacted the Texas Business Opportunity Act to regulate business opportunities.

Any scheme that requires consumers to pay $500 or more and promises a return of more than that amount is to be regulated by the TBOA. In addition, to being regulated by the TBOA, the seller must promise to help a buyer find a location to sell the product or operate equipment that is not owned by the buyer or seller or provide sales, production and marketing programs to the buyer. The seller should promise to buy back any products or equipment purchased by the buyer or anything grown or manufactured using the seller's leased or sold products or equipment.

Taxation rules applicable to payments made to family members

One of the biggest advantages of running a closely held family business is the ability to seek professional help from family members. Separate taxation rules are applicable for family employees in a family owned business, and it is necessary to be aware of these rules if you are running a closely held family business in Texas.

Payments made to your child below 18 years of age for services rendered by him or her to the trade or business are not accounted for while computing Social Security taxes, Medicare taxes and taxes under the Federal Unemployment Tax Act (FUTA) if the trade or business is a sole proprietorship or a partnership run by the child's parents. Exemption from FUTA is applicable until the child reaches 21. However, such payments are still subject to income tax withholding.

Meeting of minds can help avoid contract disputes in Texas

As many Texans know, contracts are the ties between businesses and between individuals that govern most business and many civil relationships, allowing those involved to have some expectation that each party will fulfill whatever obligation it agrees to in a contract. Although oral agreements sometimes suffice, a written contract ensures that both parties have indisputable records of their own and the other party's obligations. Legal action in the event of a breach of contract is also much easier to pursue.

Before signing a contract, a business must be sure it covers every critical aspect. This is especially true for businesses because contract disputes often involve expensive litigation. Under Texas law, a fundamental requirement for a contract is a "mutuality of obligation" or "meeting of the minds" whereby the parties completely understand and accept the terms of the contract. Ideally, these terms are clearly stated and do not allow any ambiguous interpretation.

Do Texas entrepreneurs know whom to approach for advice?

Entrepreneurs have reputations for strengthening the American economy. While the idea of setting up one's own enterprise is definitely appealing to most Americans, the challenges and intricacies related to business formation can be discouraging. Often, people who want to start their own business lack suitable counsel, which may be useful in preventing common but often-repeated errors in terms of planning or complying with relevant regulations.

Luckily for new business promoters in Texas, advice may be sought from a number of agencies, such as the Texas Business Advisor, which is a resource maintained by the state's Comptroller of Public Accounts. While some sources of advice might be given with the hope of enticing business operations to a certain location, many are offered by neutral entities, sometimes even at no cost. The monetary aspect can be crucial to entrepreneurs who often are struggling to put together the funds needed to start their businesses.

Leading accounting firm to acquire Houston-based competitor

Business owners in Houston, Texas, would agree that acquisitions are an integral part of business expansion. The strategic acquisitions of competitors are a fairly common part of a corporate strategy and not only do they further business interests but can also result in the addition of key competencies. However, acquisitions often pose unique challenges to the new business entity because of the differing cultures, work practices and the nature of the business. Therefore, acquisitions require expert consultancy services that can guide both companies through the acquisition process.

Recently, one of the largest accounting firms in the United States, BDO USA LLC, announced that it is finalizing the acquisition of the Texas chapter of a major competitor, UHY Advisors TX LLC, which has a presence in Houston and other cities in the state. According to reports, the deal is expected to be finalized by the beginning of December 2014. The deal also includes the acquisition of UHY Advisors' offices in Houston and Dallas. According to BDO, the acquisition would enhance their presence and capacity in Texas.

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Manfred Sternberg & Associates, PC
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Houston, Texas 77027
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