New York Business Legal Questions

The practice you describe would violate attorney ethics rules.  An attorney can't pay a referral fee to a non-attorney, and can only share his fee with an attorney if the referring attorney is either affiliated with the first lawyer in some way (i.e. work for the same firm) or actually does some work on the case.  Sadly, that doesn't mean that referral fees are not sometimes paid.... Read More

A lot of people use the term "partner" loosely, and you may be doing so.  If you are really referring to a general partnership, and your partnership agreement doesn't expressly deal with this issue, then each general partner is personally liable for the debts of the partnership, here the loans your partner made to the partnership.  If the partnership owed $100 to a third party, and couldn't pay, you would personally be responsible for paying the entire $100, but could sue your partner for his 50%.  Here, since the loan is owed to your partner, you would only be responsible for paying half.  Thus, if the partnership has $100 in assets, and its only liability was $50 of loans owed your partner, your share in the partnership would be worth $25 (1/2 of $100 minus 1/2 of $50.)  Of course, anything the partnership owes you has value to you, so if you were going to give up your rights to be repaid when you sold out, you should get more money for it.  Obviously this is oversimplified, but basically you're going to have to factor in the partnership's liabilities, including the debts owed your partner, in calculating how much your share is worth.  Loans owed your partner would decrease the value; loans owed to you would increase it (assuming you're going to release the loans when you sell your share.)  As for how it is handled on the books, an accountant would be better equipped to tell you how it can best be structured for tax purposes.... Read More

Although this is a small dispute monetarily, it raises some complicated issues.  In New York, there is an implied covenant against the seller of a business impairing the goodwill that he/she/it has sold, which generally means soliciting the same customers.  This covenant can be limited by express agreement, but in the absence of any agreement to the contrary, which seems to be the situation here, you may have a claim that the other vendors have breached that covenant by setting up a competing stall at the same market as the stall they sold back to you. There are many issues with this claim, however.  First, did they sell you any goodwill?  The transaction you describe sounds more like rescinding the original sale than entering into a new sale.  Also, you yourself said that the stall could be moved anywhere, so was there really any goodwill in the first place?  Also, the same covenant could apply to you.  The other side will claim that you breached the covenant by operating your bottled juice stall in the same market.  I don't think this is true, because you were already operating that stall before the sale, and therefore couldn't have been impairing any goodwill the smoothie stall had. Moreover, the other side's activities may not violate the covenant, which doesn't preclude competition, just solicitation (it's a little more complicated, but basically that's it.)  If I sell all the assets of a business to you, I can open a competing business, but I can't send out flyers to my old customers asking them to do business with me instead of you.  I'm not sure that opening a competing stall in the same market violates the covenant. Bottom line, you have a claim, but it's no slam dunk.... Read More

It's not clear whether your father gave everything to your brother, or just left it to him in his will.  If your father gave the business to your brother when he was in fear of dying, your father's gift to your brother could be considered what is known as a gift causa mortis, that is a conditional gift given in contemplation of imminent death.  Such a gift is revocable by the donee as long as he lives.  Thus,  your father may be able to revoke the gift and, upon return of the gift to him, regift it, or leave it in his will, to whomever he wishes.  However, only your father has this right - if he doesn't want to revoke the gift, he doesn't have to. Nor would you have any direct rights if your father dies.  If he doesn't wish to leave you anything in his will, he doesn't have to (unless he entered into a contract that he will - married couples sometimes enter into contract that they will leave each other all their assets when they die, in exchange for the one who dies last leaving everything to the children).  However, his surviving wife would have the right, even if she was left out of your father's will, to a share of his estate (I believe 1/3), which would include not only the value of assets passing under the will, but also a share of any gifts causa mortis, life insurance proceeds, and other types of assets. ... Read More

Not sure what  you mean by being a notary for an organization.  A notary public is a person licensed by the state to attest to the validity of another person's signature.  There is no reason that you, assuming that you pass the test and pay the fees to become licensed, can't notarize the signatures of others in your organization when they sign documents. ... Read More

The owners of equity in partnerships are partners.  Technically, the owners of equity in corporations are shareholders.  It can be important that shareholders, even 50% shareholders, not refer to themselves as partners, since partners can be personally liable for partnership obligations.  Shareholders are (with very rare exceptions) not personally liable for corporate obligations, which is one of the main reasons that people incorporate, rather than forming partnerships. Corporations can award shares, or the right to buy shares, to employees as part of their compensation, thereby affording the employees the opportunity to become part owners of the corporation.... Read More

No.  The New York labor law makes it a very serious offense for an employer to withhold compensation which is due and owing.  Depending on the particular facts and circumstances, the employer could become liable to pay not only the owed compensation, but also attorneys' fees incurred in collecting the money and a possible 25% penalty.  Of course, I've practiced law long enough to know that the employes is going to claim that it doesn't owe you the money.... Read More

Non-personal services contracts are generally freely assignable, unless they expressly provide otherwiswe.  Moreover, you don't indicate what the form of merger was (I understand that you probably don't know), i.e. whether C acquired B's stock, or just bought B's assets.  If the former, there was no assignment in the first place; Company C owns Company B.  Bottom line is that unless the contract is for personal services, which it doesn't seem to be, or expressly provides that it can't be assigned, it is as valid in Company C's hands as it was in Company B's. However, that doesn't mean that it is valid.  Automatic renewal clauses are looked at with some disfavor in New York and are not always enforced, especially when they are in contracts of adhesion, i.e. contracts which are not separately negotiated between parties of relatively equal bargaining power but are rather form contracts imposed by one party with superior bargaining power against the other, for example car rental agreements.  Indeed,  New York has a statute, NY  General Obligations Law Section 5-903, which makes such automatic renewals unenforceable in contracts for service, maintenance or repairs of eal or personal property.   ... Read More

If you have some basis to claim that the other business is somehow violating your rights by conducting their business in your county, for example, if they were using some of your intellectual property (trade secrets, trademarks, patents, etc.) or violating a non-compete agreement between you, you would sue the entity and their principals for the wrong (e.g. trademark infringement), and at the same time move for a preliminary injunction enjoining them from continuing the infringement during the pendency of the action.  You would bring that motion on by Order to Show Cause which would contain a temporary restraining order immediately restraining them from continuing the activity you allege to be wrongful while your preliminary injunction motion is pending.  In order to win such a motion in NY state court, you must be able to show a likelihood of succeeding on your claims, irreparable harm absent the granting of the preliminary injunction (money damages are not irreparable harm, but damage to good will can be), and that the balance of the equities tip in your favor. The standards are slightly different in federal court. However, I have a basic question.  if they are now using a different name, and presumably not one protected by any trademark you own, what is the basis for the resttraining order and injunctiojn, particularly one which seems overbroad (i.e. not asking that they be prevented from using the same or similar name, but one which prevents them from doing business at all)?  ... Read More

There are many ways to accomplish this.  Probably the easiest way would be to form another legal entity (e.g. an llc, or a corporation) and have the first entity assign the lease to the second.  Unless your lease is unusual, you will need your landlord's consent to do this, but the landlord should not have any objection as long as the personal guarantee continues.  However, you have to make sure to run each entity separately, e.g. don't commingle funds, documents and make sure there is payment from one entity to the other for any transactions between them (e.g. don't just transfer inventory from one to the other freely), have separate corporate meetings, stationery, etc., so that any creditors will not be able to "pierce the corporate veil" of one of the corporations to get to the assets of the other.... Read More

It depends upon the terms of your employment. This would require a review of your pay checks, any documents you were given when you started your employment, any agreement you signed and any postings at your place of employment. This is not intended to be legal advice and is general in its nature. No attorney client relationship exists or is formed by this information. Furthermore, this does not represent the views  or opinions of LexisNexis or its affiliated companies.... Read More

With whom did you contract, the company or the owner personally?  If you contracted with a company, is the company a separate legal entity, like a corporation or an llc, or is it a sole proprietorship?  If you have a contract with an independent legal entity, like a corporation, for example, only the corporation is liable on the contract, not the owner, and you should sue only the corporation.  As a practical matter, if you aren't sure about the answers to these questions, you should sue both.... Read More

I'm not sure I understand your question, but if you're asking if someone else can pay your tuition, the answer is yes, I'm sure the school doesn't care where the money comes from.  Of course, the payment made by your employer will be considered part of your compensation, not a gift, and you will have to pay income tax on it.... Read More

Being terminated as an employee does not terminate your rights or obligations as a member of the Llc.  Llc members are not normally personally responsible for the llc's obligations, but if you were responsible for the payments before you were terminated as an employee, your firing should not affect that, unless the instrument pursuant to which you were responsible for payments (llc members' agreement, guarantee or surety agreement, employment agreement, whatever) provides to the contrary.   For example, if you signed a guaranty which said you would be responsible for the llc's building payments only as long as you were employed by it, you would no longer be responsible.... Read More