The Bamberger Blog » Corporate and Business

ONLINE SHOPPING 101: Do You Know Your Legal Rights?

kjewell — Tue, 31 Jan 2012 13:30:48 +0000

In this day and age, if you purchase products online, you probably already know the basics of being a safe shopper. A safe shopper would never enter their credit card information on a screen that did not indicate that it was a “secure” site. A safe shopper would never buy a product without carefully reading the product description in order to fully understand what was being purchased. A safe shopper would always make sure that purchases were made from a reputable seller. But as a safe shopper, have you ever checked to see what your legal rights are if an online purchase goes horribly wrong?

Your first stop should be to check the legal terms of the website where you are shopping. Sometimes you have to click through several menus to find it, but it usually has a title such as “Terms and Conditions” or “Legal Terms.” If the selling website does not have one, do not buy from that seller. If you are buying from a website such as eBay or Amazon that also sells for third parties, make sure that you understand the differences between the legal terms and conditions on eBay’s or Amazon’s website, as well as any additional legal terms or conditions from the individual seller. Again, this may require you to click on a link on the product description page or a link to the individual seller’s website.

When reading these terms and conditions, make sure you understand what your legal remedies are if the transaction goes wrong. Are you able to sue in court? Some sellers’ terms require that you use arbitration or mediation to resolve any disputes. While these methods of resolution may be quicker than going to court, they can sometimes be more costly and may require you to travel to another part of the country to attend the arbitration or mediation proceedings.

Even if the terms and conditions allow you to sue, the seller’s terms may require that you sue in a particular state. If you can only sue the seller in Alaska to recover your damages, the cost involved may be prohibitive in seeking the justice you deserve.

Do you know how long you have to file a claim or a suit against the seller? Many sellers’ terms give you a very short window for raising any disputes or filing a suit related to a transaction with the seller. In your state, you might have up to four years to file suit on a breach of contract action. However, the seller’s terms and conditions might limit your period for filing suit to one year or less.

A quick review of the legal terms on a seller’s website can often save you heartache down the road, particularly if the purchase of a big ticket item does not go as planned. A couple of clicks before you purchase can make you a safe and happy shopper down the road.

Author: Laura A. Scott (bio)
Phone: 812.452.3557
email: lscott@bamberger.com

Limited Partner? General Partner? What Does It Matter, We’re All Friends, Right?

kjewell — Thu, 19 Jan 2012 13:30:09 +0000

Even if the answer to the question is “Yes, we’re all friends,” the liabilities of a limited partner and a general partner in a partnership can mean a big difference. General partners are personally responsible for the debts and obligations of the partnership, regardless of how much capital the general partner has contributed to the firm. If there is more than one general partner, then the general partners are jointly liable for these obligations. These obligations can include liability for torts committed by a partner in the ordinary course of business of the partnership or with prior authorization, and a partner’s breach of trust.

In contrast, limited partners are not personally liable so long as they comply with the requirements of Indiana’s limited partnership statute. To put it simply, there is a big difference between a general partner and a limited partner in a limited partnership, and failure to know the difference can quickly turn a friendly business arrangement into one that is not so friendly.

Author: Laura A. Scott (bio)
Phone: 812.452.3557
email: lscott@bamberger.com

Due Diligence 360: Searches

kjewell — Thu, 29 Dec 2011 13:30:48 +0000

When considering a purchase of a business or the assets of a business, a buyer typically thinks of conducting a UCC financing statement search with the Secretary of State’s Office in the state where the seller is organized. A UCC financing statement lien is typically a consensual lien created between a lender and a borrower where the borrower has granted a security interest in its personal property to the lender. The lender perfects its security interest by filing a UCC financing statement. However, in order for the buyer to find all potential liens on personal property, the buyer must broaden the scope of his or lien search.

First, the buyer needs to consider a fixture filing search in any county where the seller may have items attached to real estate that will be the subject of the buyer’s purchase. These will also typically be voluntary liens between a lender and a borrower, but often the county level search is overlooked.

Second, a buyer needs to consider searching for federal tax liens, typically IRS tax liens. In addition, a buyer needs to look for state tax liens. These can include employment tax liens from the state and liens for unpaid sales taxes or unfiled sales tax statements.

Additionally, buyers should consider a judgment lien search. Judgment liens arise when a judgment is filed against a person or entity at the conclusion of litigation. Tax liens and judgment liens can all potentially attach to personal property, and a buyer of the personal property should find out about these liens before taking title.

Finally, a buyer should consider a litigation search. This type of search will locate any open litigation matters that involve your seller. This may be important information to know. An open litigation matter can become a judgment and thus a judgment lien on assets very quickly. A potential buyer would want to know about any pending litigation matters so that the buyer can monitor to make sure that these lawsuits don’t turn into judgment liens on the property prior to the buyer purchasing the personal property.

Conducting a thorough search of all potential liens and encumbrances on personal property can help assure a buyer that the buyer is getting what the buyer paid for.

Author: Laura A. Scott (bio)
Phone: 812.452.3557
email: lscott@bamberger.com

Indiana Chief Justice Shepard to Retire

kjewell — Wed, 07 Dec 2011 17:20:54 +0000

Indiana Chief Justice Randall T. Shepard announced today that he will be retiring from his post in March 2012. The Chief Justice is an Evansville native, a former Vanderburgh County Judge, and the former executive assistant to Mayor Russell Lloyd. He was appointed to the Indiana Supreme Court in 1985 by then Governor Orr, and he became Chief Justice in 1987. He is the longest serving state court Chief Justice in the entire country. He is also the only Chief Justice from Evansville.

Chief Justice Shepard is responsible for significant improvements to the Indiana court system. He was asked by Governor Mitch Daniels to work with former Governor Joe Kernan to develop ideas on how to streamline government. For this work, the Indiana Chamber of Commerce awarded both Shepard and Kernan with the 2008 Government Leader of the Year Award. He worked with former Governor O’Bannon to develop a program to help educationally and economically challenged students succeed in Indiana law schools.

For his work, he is slated to receive the national Sixth Annual Dwight D. Opperman Award for Judicial Excellence. He has taught law school courses at Yale, New York University and Indiana University.

The Evansville Vanderburgh County School Corporation recently honored the Chief Justice by developing a program for local students called the Randall T. Shepard Academy for Law and Social Justice. The Evansville Bar Association recently restored a courtroom in the Old Vanderburgh County Courthouse and named it the Randall T. Shepard Courtroom.

Governor Daniels will select the next justice.

FOREIGN QUALIFICATION: Is Your Business in Compliance?

kjewell — Tue, 06 Dec 2011 13:30:19 +0000

A corporation, limited liability company, or other business entity is formed under the laws of the particular state. However, when that business operates in other states outside of its home state, the business entity will often be required to qualify as a foreign business entity in those other jurisdictions in which it is doing business. The process of qualification as a foreign business entity in a particular state is usually a simple process that requires filing an application in the foreign state, obtaining a registered agent located in the foreign state, and paying a fee. Once the business entity has been qualified in a foreign state, then the business entity will usually be subject to ongoing compliance requirements such as filing business reports and maintaining a registered agent in the foreign state.

The consequences of failing to register as a foreign business entity in a state where the business is operating can vary. However, the penalty in most states usually involves some combination of a monetary fine and the prohibition of the business from filing any lawsuits in the foreign state. Not all activity that a business may engage in, in a foreign state, will require them to register as a foreign entity. What constitutes doing business in a state varies from state to state. Most state laws do not define what constitutes doing business in the state, but often contain a list of what does not constitute doing business in the state. These lists typically include things such as maintaining a bank account, soliciting orders that require acceptance outside the state, or engaging in an isolated transaction.

If you have questions about whether or not your business’ activity in a foreign state would subject you to the requirements of foreign registration in that state, please contact a Bamberger attorney.

Author: Laura A. Scott (bio)
Phone: 812.452.3557
email: lscott@bamberger.com

Upcoming Seminar – Hot Topics in Manufacturing

kjewell — Mon, 14 Nov 2011 15:26:16 +0000

Bamberger will be joining forces with Harding, Shymanski & Company, P.S.C. and University of Southern Indiana to host a seminar focused on hot topics in manufacturing on Thursday, December 1, 2011 from 7:30 am-9:45 am at the USI Business and Engineering Center. The featured speakers are Daniela Vidal (USI), Kathy Ettensohn (Harding), Shannon Brewer (Harding) and Jamie Dameron (Bamberger).

In this complimentary seminar, our four panelists will cover hot topics manufacturers are facing in today’s business world—including environmental concerns, finance issues and workforce development. The seminar is free of charge and will include a tour of the new USI Business and Engineering Center (BEC) featuring its cutting-edge FESTO iFactory production line following the speakers’ presentations.

The seminar will be held in the BEC’s third floor board room; parking is available at USI’s lot J. The address is 8600 University Boulevard; a map of the USI campus can be found on their website at http://www.usi.edu/visit/map/. Breakfast will be provided. If you’d like to attend this informative seminar, please RSVP by Wednesday, November 23, 2011 by calling 812-452-3567 or send an email to rsvp@bamberger.com

Author: Kim Jewell (bio)
Phone: 812.452.3588
email: kjewell@bamberger.com

Why is My Employer’s Attorney Giving Me a Miranda Warning?

kjewell — Thu, 10 Nov 2011 13:30:29 +0000

In an era of accounting and securities scandals there seem to be more and more internal corporate investigations. If you happen to work for an employer that gets caught up in one of these internal investigations you may be interviewed by your employer’s outside lawyers. If this happens you need to be aware that these attorneys probably do not represent your interests even though you are an employee of the company that they represent. You may want to consider hiring your own counsel to be in attendance at these interviews to represent your interests.

In this situation the employer’s lawyers may give you what is called a “corporate Miranda warning.” The attorney will indicate that she represents the corporation, not you as the employee, and will remind you that conversations and other types of communication between you and her will be privileged. However, this privilege belongs to your employer. Therefore, you have no right to declare these communications privileged in any litigation; meaning that the content of your communications with this lawyer could be disclosed in court. If your employer’s lawyer does not give you these warnings it does not mean you should not take heed. All the more reason to consider having your own counsel present to protect your interests.

Please contact your Bamberger attorney for more information on this subject.

Author: Lori Young (bio)
Phone: 812.452.3560
email: lyoung@bamberger.com

Kicking the Tires on a Business Purchase

kjewell — Tue, 25 Oct 2011 13:30:06 +0000

Purchasing a business or the assets of a business can be a risky proposition. One way you can decrease the risks to yourself as a buyer is to obtain as much information about the business as possible.

The following is a list of places you will want to “kick the tires” on almost all business purchases:

Inspection of Assets. You may need to get the assistance of a professional to assist in this process. You will not want to rely on valuations or appraisals that are out of date or created for the benefit of the seller.
Review of financial statements. Try to review audited financial statements if possible. You may need the assistance of an accountant to review the financial statements. Ask for documentation of any questionable information. As part of your review of financial information you should also review recent tax returns.
Customer and supplier lists and contracts. If after the purchase of the business you will be relying on existing relationships with customers and suppliers you will need as much information about those customers and suppliers as possible, including any existing contracts.
Corporate Records. You will need to review the corporate records (i.e. articles of incorporation, bylaws, recent board and shareholder meeting minutes) of the seller to ensure that the individuals you are dealing with have proper authority to sell the stock or assets of the business.
Employee Matters. If you are purchasing all of the stock or substantially all of the assets of an entity you will need to obtain detailed information about the employees including any pension plan or other employee benefits. You need to know the status of any liabilities of the business to its current employees, including accrued vacations and options or rights to purchase stock.

The above list is not intended to be exhaustive but simply illustrative of the type of information you need to obtain in almost any business purchase that you are considering. You may hear accountants and lawyers referring to this as performing “due diligence.”

Knowledge is power in the hands of the buyer of a business. Information about the business you are purchasing will reduce your risks and put you in a better negotiating position with the seller.

Author: Lori Young (bio)
Phone: 812.452.3560
Email: lyoung@bamberger.com

Bamberger Seminar – 3rd Annual Employment Law Horror Stories

kjewell — Wed, 28 Sep 2011 13:30:12 +0000

Back by popular demand, join the attorneys at Bamberger for the 3rd Annual Employment Law Horror Stories seminar presentation. This complimentary seminar will be held on Wednesday, October 26th from 7:45-9:00 am.

We’ll celebrate the Halloween season by telling gory tales of liability dilemmas like wrongful termination suits, data breach, sexual discrimination and harassment, holiday parties gone wrong and more. These tales may be juicy and scandalous, but these serious and all-too-common violations can cost companies like yours thousands of dollars in lawsuits. We’ll also offer easy solutions that you can implement to prevent these problems!

The complimentary seminar will be held at the Bamberger Conference Center on the 10th floor in the Hulman Building. Breakfast will be provided. If you’d like to attend this informative seminar, please RSVP by Wednesday, October 19, 2011 by calling 812.452.3567 or email us at rsvp@bamberger.com.

Author: Kim Jewell (bio)
Phone: 812.452.3588
email: kjewell@bamberger.com

Ten Questions to Ask Before Starting a Non-profit

kjewell — Fri, 23 Sep 2011 13:30:27 +0000

Many of us enjoy the satisfaction that comes from working with a charitable organization, but often we do not realize the substantial work that goes into forming and operating a non-profit organization. Sometimes when a group of people come together with a common charitable mission in mind, they believe that the appropriate first step is to form a non-profit organization. This is not always the right thing to do. Before deciding to form a non-profit organization, organizers should answer these 10 questions in order to see if forming a not-for-profit organization is really necessary:

Is this a unique idea? There are so many charitable organizations already in existence that it is likely there is another organization with the same or a similar mission already in existence. Do some research to decide if there are similar organizations and how your organization might differentiate itself. Otherwise, your brand new not-for-profit may be competing for dollars with an organization that is already in existence.
If a similar organization already exists, can your mission be better accomplished by teaming up with the existing organization? Often, it may be quicker and cheaper (and a lot less trouble) to affiliate yourself with an existing organization. Explore the possibility of becoming a local chapter of this existing organization, or perhaps affiliate yourself in some other way with an organization that is already established.
Have you considered alternatives to forming a non-profit organization? Often it is not necessary to form a separate legal entity in order to carry out your group’s mission. Depending on your organization’s mission, complexity and activities, it may make sense to operate as an unincorporated group of individuals for a period of time, or to work with a fiscal sponsor until you have generated sufficient revenue in order fund some of the necessary start-up costs.
Are you ready to run a business? Starting a not-for-profit organization is a lot like starting a business. You need to know the laws that govern those business organizations and charitable organizations in your area, as well as best practices for running a business and a charitable organization. Starting a non-profit takes every bit of the same amount of dedication and hard work as starting a for-profit enterprise.
Are you ready to draft a business plan? Just as a for-profit business needs a business plan to guide its work, a non-profit organization also needs a business plan. Ideally, the business plan should cover the first 3 years of existence.
What will be the non-profit’s charitable purposes? Take a moment to actually write out the charitable purpose of the organization. This is an important first step in understanding what your group’s mission is and making sure that the group has a common vision.
What will be the organization’s core activities? Depending on the type of activities your group intends to engage in, this could determine what type of corporate status you will need to obtain. If your activities are simple, such as picking up trash at a local park, then a formal organization may not be necessary. However, if your activities involve fundraising, for example, then a more formal organization may be necessary.
Who are the intended beneficiaries? Whether your organization is intended to benefit a relatively small group of people, for example, members of your immediate family only, or as big as the public at large, then this needs to be identified.
Will you have sufficient funding to start and maintain a non-profit organization? Depending on the scope and complexity of your group’s activities, it may require quite a bit of funding in order to get your mission off the ground. You need to consider what type funding is necessary and where you plan to seek such funding in the initial stages of planning your not-for-profit. Consider sources of funding, both to start and sustain the organization.
Who do you need to have on board? Consider what actions need to occur in order for your not-for-profit to get off the ground. Will you need legal advice? Will you need tax advice? Will you need technical expertise? Will you need the buy-in of stakeholders? You need to consider who all of the individuals are that you need to bring to the table in order to get your group off the ground. Identify those individuals and feel them out in order to determine your likelihood of success.

Volunteering your time can be a great way to give back to your community. However, before you embark on setting up an organization to formalize your volunteer activity, considering the questions above can help you form a good framework before proceeding to the next step.

Author: Laura A. Scott (bio)
Phone: 812.452.3557
email: lscott@bamberger.com