Austin TX Business Law Blog

For the intrepid entrepreneur, starting a small business can be a rewarding and fulfilling adventure. Among many of the ways to describe small business ownership, however, the word “easy” would not usually be present. Small business ownership comes with risks.
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In the business world, contracts are going to come up, one way or another. Contracts in business serve a variety of purposes and can be useful both internally and when establishing relationships with vendors and clients. When properly executed, contracts can protect your business dealings and promote the sustainable growth of your business endeavors. When proper precautions are taken when contracting, however, there can be serious and lasting repercussions. The fallout can be both immediate and be felt for an extended period of time as problems further develop and potential litigation ensues.
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Most of us have signed an adhesion contract even if we were not aware that what we were signing was an adhesion contract. These types of contracts have the terms drafted just by one party. The signee of the contract has no input on the contract terms. As such, courts will be reluctant to enforce an adhesion contract if certain precautions are not taken because of the great disparity in bargaining power of the two parties to the agreement. Sometimes referred to as “boilerplate contracts,” adhesion contracts, when properly executed, can be extremely helpful to businesses.
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Sometimes there are business formalities that should be observed despite there being no legal obligation to do so. This is true, for instance, with employee handbooks. While there is no legal requirement for a business to develop and distribute an employee handbook, it can have huge benefits for your company, including protecting it from legal trouble down the road.
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Most of us have signed an adhesion contract even if we were not aware that what we were signing was an adhesion contract. These types of contracts have the terms drafted just by one party. The signee of the contract has no input on the contract terms. As such, courts will be reluctant to enforce an adhesion contract if certain precautions are not taken because of the great disparity in bargaining power of the two parties to the agreement. Sometimes referred to as “boilerplate contracts,” adhesion contracts, when properly executed, can be extremely helpful to businesses.

The importance of laying a solid foundation for your startup cannot be understated. In the excitement of planning for the launch of your new company, it can be tempting to press forward and leave some of the seemingly mundane tasks by the wayside. Formalities and legal protections, the things that may seem not so thrilling, can be incredibly important.

Take company bylaws, for instance. This is the document that will set forth the business of your business.

The corporate structure offers a variety of benefits. There can be major tax benefits and major liability benefits. You see, the corporate structure offers owners limited liability meaning they will not be held liable for actions taken by the corporation. In some situations, however, the “corporate veil” protecting owners from liability may be pierced if a court believes the corporation is merely a front. As such, it is critical for corporate formalities to be upheld or risk legal consequences and putting your personal assets at risk.
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Business succession planning involves establishing protocol for passing leadership roles down the chain of command within a company. It involves identifying key leadership roles, what those roles require, and who within the company would be fit to take over when the need arises. It is only natural for there to be some turnover in a company and this includes turnover at the management and executive level.
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If you are considering establishing your business as a limited liability corporation (LLC), then you are going to need an LLC operating agreement. Not only does this agreement govern the operation of your LLC, but it sets forth key details relating to the inner workings of the LLC that will be critical to clearly communicate to the LLC members. In setting forth key provisions in the LLC operating agreement, you provide clear guidance on how important matters are to be handled within the LLC.
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Have you heard that the FTC has proposed a ban on non-competes? It’s true! The Federal Trade Commission (FT) proposed a new rule in January of this year that would ban employers from imposing non-competes on their workers. Employers throughout the U.S. should be aware of these proposed rules and their status as they work their way through the comment period, which is open through March 20, 2023.

FTC’s Proposed Ban on Non-Competes

The rule proposed by the FTC would put a general ban on employers using non-compete clause.
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Those in the business world, owners, entrepreneurs, and employees, should have a basic understanding of business law as this are of the law obviously can have a big impact on their lives and livelihood. Here, we’ll take a look at some business law basics to get a better understand of what this robust area of the law entails and how it impacts those at varying levels in the business world.

Basics of Business Law

First thing is first, business formation is a key aspect of business law and it can be difficult to wade through. There are a number of different types of business entities and each have their own set of liability, taxation, and other issues that can have powerful ramifications for a business and those involved in a business. Entrepreneurs looking to establish a business should familiarize themselves with the various types of business entities and what types may best suit their needs.
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