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Cleveland Business & Commercial Law Blog

Business valuation useful in business planning

At one time or another, each Ohio business owner will begin to wonder exactly how much his or her business is worth. There are a variety of reasons that this thought process will come about, including formulating answers to shareholder questions, purchasing or selling parts of the business or equipment, possible retirement or even estate planning. Having a good understanding of the value of the business is often necessary for your business planning purposes.

First of all, if you have shareholders invested in your business, it is likely that they will want to be kept informed. They are often interested in the actual cost involved in doing business as well as the actual income received. This is often in addition to the dividends that they expect to be paid. An accurate valuation of the business can help to minimize potential shareholder disputes and conflicts.

Contract disputes with city prompt filing of lawsuit

Like everywhere else in the country, Cleveland relies on private contractors for many of its projects. In many cases, everything goes according to plan, but in others, contract disputes arise. If the city and the contractor are unable to come to an agreement outside the courts, a lawsuit could result.

This is what recently happened in a city in another state. A construction company hired to perform construction on the city's airport filed a lawsuit alleging breach of contract. As is the case in many disputes, money lies at the center of the controversy.

'Fixer Upper' star Chip Gaines faces business litigation

The couple made a splash on HGTV with their down-to-earth style and stunning home remodels. Fans in Ohio and beyond saw Chip and Joanna Gaines quickly rise to stardom following the success of their TV show, "Fixer Upper," in which Gaines's company, Magnolia Realty, convinces couples to purchase inexpensive homes that he and Joanna then renovate and redecorate. The TV show spawned a line of products for the home as well as books and other merchandise. However, it also spawned business litigation as former partners of Chip Gaines claim they were defrauded.

The two men co-owned Magnolia Reality with Gaines in the years prior to the his TV breakthrough. Apparently, Gaines purchased their shares of the real estate company for $2,500 each. However, the two partners claim that Gaines had already negotiated a deal with HGTV for a one-hour premier of "Fixer Upper." They claim Chip and Joanna were secretly aware that the network planned to fast-track the new series and build a home improvement empire around the couple.

The corporation as a form of business organization

After months or perhaps even years of planning, it is time -- time to dive in and join hundreds of thousands of entrepreneurs across Ohio. The concept is sound and the opportunity for a new business startup seems right. Perhaps one of the only remaining decisions is what type of business organization to form.

For many business owners, a corporation is the appropriate choice. There are many reasons for this. First, a corporation affords the individual a limited liability. The corporation is a separate entity from the individual; therefore, its debts and business undertakings are considered to be separate from the individual. A corporation also has a very specific management structure and as such is often more readily able to attract investors and stockholders.

Can I be fired for reporting illegal activity at work?

Imagine that you are at work and witness a fellow employee or supervisor committing a crime. You are about to report the illegal activity and then you stop and think to yourself, can I be fired for reporting this? What if my company accuses me of not being a loyal employee? The answer is that you are protected from retaliation by your employer for reporting illegal activity as long as you follow the proper steps.

Equity investor may be business planning and financing answer

For some Ohio businesses, traditional financing options are not available or for some reason not that attractive. Perhaps an ongoing business wants to expand; however, they do not want to go through all of the banking red tape for a traditional business loan. Or, perhaps a new business venture is forming and traditional financing is not readily available. In some cases, the use of equity investors as a part of the business planning and financing process is the best option.

An equity investor actually purchases a portion of the business. As a partial owner, the equity investor expects a return on the investment, yet he or she also recognizes that as with any business venture, there is risk involved. The possibility that significant gains can be made is there, along with the possibility of a total loss of investment. Thus, the equity investor typically expects a significant portion of company profits or other such return for the risk involved.

Ohio consumers may soon fall victim to contract disputes

Companies are in business to make a profit. In order to do so, they usually enter into contracts with other companies to provide products or services. Then, at times, companies are bought out by other companies, and the contracts that are currently in place may not be a good fit with the new situation. It appears that a recent corporate acquisition has resulted in contract disputes that may soon have an impact on some of the company's Ohio-based customers.

In 2016, Charter Communications acquired Time Warner Cable. At the time this occurred, Charter Communications already had a contract in place with Fox. However, in an apparent review of contracts, Charter determined that the terms of Time Warner's contracts were more favorable; therefore, according to Fox, Charter began paying based upon Time Warner's contracts. While Fox claims that Charter is ignoring the contract that is in place, Charter claims that Fox is attempting to profit by threatening to remove its programming at the expense of the consumer.

Employment contract disputes often arise from implied contracts

Resumes have been reviewed, interviews conducted and an offer of employment made. This scenario occurs daily throughout Ohio in shopping malls, schools, manufacturing companies and many other businesses. The jobs involved range from that of the shoe salesperson to a teacher to a business executive. While the basic process may appear to be the same, very little else is until it comes to the matter of employment contract disputes.

Ohio is considered to be an "employment at will" state, meaning that the employer can choose to end the employment relationship at any time for any reason. However, this ability can be limited by the terms of an employment contract. If there is an employment contract in place, then both parties are typically bound by its terms.

Contract disputes can often be avoided by putting it in writing

Contracts are a part of doing business in Ohio. There are contracts for the lease of property, purchase of property, employment service and more. While most would like to think that each party will honor his or her part of the contract, this is not always the case. All too often, there are contract disputes that, at times, lead to legal concerns.

Contracts can be either written or oral. However, oral contracts can often lead to misunderstandings and disputes regarding the exact promises that were made. While both types of contracts are valid, there are some types of contracts that must be in writing to be enforceable.

Many things to consider in business planning process

Starting a new business can be an exciting time for Ohio entrepreneurs. Along with the excitement, however, comes the planning, financing and responsibilities that go along with such ventures. There are many things to keep in mind during the business planning process.

One of the first considerations in this process is the various contracts that will be needed. If one is going to rent space for the business, a rental agreement is a good idea. Additionally, any other services that the business will be receiving should be specified in the form of a contract. Then, if there are other individuals involved in the business, a contract between the individuals can help to prevent misunderstandings and problems in the future.

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