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Cleveland Business & Commercial Law Blog

Why contracts and agreements should be notarized

One simple, yet effective, way that Ohio businesses can avoid contract disputes is to have all contracts and agreements notarized. This may seem like an unnecessary and time-consuming step, especially if a notary public is difficult to locate. However, a business owner who has had the legitimacy of a contract challenged because the signatures were challenged will most likely consider such a step to be mandatory in the future.

Unlike the past, modern law requires contracts and agreements to be notarized only in a few special cases, such as real estate deeds. In those cases, a notary public who is commissioned by a governmental authority to witness signatures will provide a guarantee that the signatures are genuine. Even when the law does not require signatures to be notarized, there are several instances where it makes sense to do so.

When to update a business plan

Business owners in Ohio may periodically need to review their business plans and ensure that they are current. A business plan is not simply a document that is written to secure funding for a business in its early days. It can serve a business owner throughout the life of the business by providing a foundation that can be reviewed and updated according to the business's changing needs. Business planning should be an ongoing task.

There are a number of reasons both positive and negative to update a business plan. Even negative events that trigger a business plan review can be viewed as challenges that may ultimately take a business to the next level. Having a product copied by a competitor, the departure of a key staff member or a change in relationship with a major vendor could trigger a review of the business plan. Changes in competitor tactics, regulations or the economy are also situations that signal a need for a review.

Small business loans slowing while economy recovers

As many Ohio business owners might know, bank loans may be available to them, but the number of small businesses that seek loans has dropped. This may reflect a less-than-hopeful opinion of the market, or it may indicate a level of prudence amongst small business owners.

According to a representative of a large banking lender, the economy's rebound means that banks have more money to lend and that rates for lenders are still low. Bank representatives say that they want to lend start-up money or money to enhance existing businesses. Borrowers can search for loans at the best rates for their needs.

Xerox agrees to complete work on Medicaid payment system

Ohio residents may be interested to learn about a breach of contract dispute that was just resolved between Xerox and the Montana Department of Health and Human Services. As of July 18, the state agency has confirmed that Xerox is no longer in breach of contract, and the company has begun cooperating with the planning of a $70-million-dollar project to create a payment handling system.

Right now, Montana DHS is using a payment system that is over 30 years old and is not able to interpret the complexity of new payment rules and regulations. According to the newly revised work plan, Xerox has agreed to create a new payment system that will be designed to last 20 years, called the Medicaid Management and Information System.

Developer looking to build new apartments in Avenue District

Pending approval from the Cleveland City Planning Commission, Zaremba Inc. plans to build 108 new apartment units in downtown. The nine-building development project would create 59 one-bedroom apartments and 49 two-bedroom apartments in the Avenue District. The units would range in size from 600 to 1,100 square feet and include a mix of townhouse-style homes and flats. Seventy-seven new parking spaces would also be included in the real estate development project.

An apartment broker for Marcus & Millichap questioned the feasibility of Zaremba's development plans. He commented that the Superior Avenue location has always been questionable because it is somewhat isolated. In 2007, a development project in the Avenue District that was meant to become a several-block neighborhood only sold five condos before going into foreclosure.

Preparing a proper joint venture agreement can help avoid trouble

Cleveland business owners may be interested in an article detailing some of the positive and negative aspects of going into business with another. These joint ventures have risks that can be mitigated by using proper contractual agreements.

Joining up with another company in order to achieve a business goal can hold a lot of promise for success. Working together, the companies can leverage each others' strengths and minimize weaknesses. However, if the joint venturers fail to properly plan for when things go wrong, this can lead to legal battles down the road. Additionally, when one party has superior bargaining power when negotiating the partnership, this can lead to an unbalanced business relationship.

Hewlett-Packard shareholder dispute dismissed by federal court

Ohio business owners may be interested in the latest news on a lawsuit filed by shareholders against tech giant Hewlett-Packard. The claim against the company has been dismissed despite the shareholders' second chance at filing.

In August 2013, a group of HP shareholders led by a New York-based retirement fund filed a lawsuit against the tech company in a northern California federal court. They alleged that the actions of HP's former CEO were a breach of the company's Standards of Business Conduct, which dictated their commitment to ethical business practices. However, the federal judge dismissed the case without prejudice, instructing the shareholders to refile with a more specific claim. On June 25, the shareholders' claims were dismissed once again. This time, though the complaint contained more specific facts, the judge found that they did not rise to the level of securities fraud.

SEC takes on Ohio Ponzi scheme

On May 29, the Securities and Exchange Commission filed a lawsuit against a group of several individuals involved with a Ponzi scheme in Ohio. An Akron-based group, KGTA Petroleum, was reportedly comprised of residents from the northeast area who employed a scheme to fraudulently obtain approximately $21 million from 50 victims. The SEC filed a lawsuit with the U.S District Court for the Northern District of Ohio in an effort to recover restitution for investors and request civil penalties against the defendants.

KGTA, seven individuals and two consulting businesses are named as defendants in the suit. Each of the consulting businesses is owned by one of the defendants individually named in the lawsuit. The SEC claims that two of the defendants created KGTA, a fake corporation that claimed to buy oil and other fuel at a discount and resold it for significant profit. The lawsuit claims the defendants said there would be no exposure to market risk and that the investors would receive a 2 to 4 percent return in each month.

Security companies reach settlement in patent dispute

A settlement has been reached in the patent dispute between SecureBuy, LLC, and Ohio-based CardinalCommerce Corporation. In November 2013, SecureBuy initiated a lawsuit against Cardinal in a federal court that contested the latter's patents with the U.S. Patent and Trademark Office. Both organizations deal in online security. SecureBuy, a security firm with an emphasis on safeguarding online purchases, has since acknowledged the validity of Cardinal's patents and withdrawn its litigation. The issue concerned Cardinal's inventions concerning the Universal Merchant Platform and its role in authenticating payments on the Internet.

Although sources did not disclose the terms of the settlement, both companies expressed satisfaction with the agreement. The CEO of SecureBuy stated that the company is looking forward to more productive business relations with Cardinal in the future, while the CEO of Cardinal emphasized his satisfaction that the company's investment in its intellectual property has been affirmed. CardinalCommerce maintains its headquarters in Mentor.

New laws limit townships' authority for economic development

Townships in Ohio that want to expand their economic development zones or make new ones will be subject to new requirements in 2014 due to House Bill 289. People involved with business planning might interested to learn that townships will no longer be able to create joint economic development zones starting January 1, 2015. Existing JEDZs will not be effected. If any townships or municipal corporations wish to make significant amendments to existing zones, such as increasing tax rates, they must do before the end of 2014. New zones should also be formed by the end of the year.

The main supporter of House Bill 289, Rep. Kirk Schuring, said that JEDZs were originally formed to foster cooperation between local governments and to encourage economic development. However, some local governments have been using the JEDZs an a way to levy taxes without employees or employers being able to oppose them, according to Rep. Schuring. The bill requires amendments and new JEDZs to have plans that detail the way income tax collections are to be used. A minimum of half the taxes must be devoted to things like improvements to facilities and services.

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