Texas Business Legal Questions

If the seller misrepresented the debts of the business, then it may be considered fraud.  Fraud requires a knowing misrepresentation upon which you relied to your detriment.   Here, it appears that you relied on the seller's statement that the business was debt free when you decided to enter into the transaction, and now, as the owner of the business, you must pay these outstanding obligations in order to operate the business, which you just bought.   So, as to fraud, the question is whether the seller knew about the permit and tax issues when he represented there were no debts.   There are other potential causes of action which may also apply to your situation, e.g. negligent misrepresentation and breach of contract.  ... Read Answer

Is it necessary?  No, but it may be advisable.  The main reason that people conduct business through entitles is to limit their liability, so that the obligations of the business don't impact their personal assets (although, of course, some people will only deal with the business entity if its principal personally guarantees the obligation). ... Read Answer

The answer to your question requires a review of your Purchase and Sale Agreement (PSA) with the prior spa owner.  If there were no express representations about this matter in the PSA and the PSA did not contain a non-competition / non-solictation provision, then it will be very difficult to seek compensation or rescind the transaction.... Read Answer

This communication is not legal advice and you do not have any right to rely on the contents. In the future you may want to document the transactions as a financing lease in which you retain title to the property. The lease or a memorandum of the lease can be filed. In addition, you may want a written agreement with each landlord that subordinates the landlord's right to a lien in favor of your lease. We would be available to you to prepare the paperwork involved at out ordinary rates for legal services. Very truly yours, Stephen Kaplan, PC 1040 N. Central Expressway, Suite 800 Dallas, Texas 75231 214.346.6048... Read Answer

That's a tough question. First, if you have no agreement, then there is a question whether you have an LLC or a partnership. Regardless, you do have certain rights as a member/partner of the entity. You would need to follow the procedures as outlined by the Texas Business Organizations Code. When that fails, and it probably already has, then you would need to contact an attorney.... Read Answer

This depends upon the type of business that you have and what is specified in your operating agreement, if there is one.  Do you have an LLC or is it a partnership that you formed without filing anything with the state?  What is your agreement concerning the business operation and is it in writing?  Many things can be dictated by a written operating agreement, while some cannot be changed.  There are Texas statutes that govern dissolution of a partnership if you do not have specifics in an operating agreement.  Also, how many partners are there total and how much percentage ownership and vote does each partner have?... Read Answer

If the method of doing business cannot be patented or the product or service cannot be trademarked or a trade dress established, there is very little that can be done. You can protect insiders in your organization from revealing true trade secrets with restrictive covenants and other agreements but that will not necessarily protect you against third parties.... Read Answer

No.  Whether it is taxed as a corporation or not is a Federal Tax issue. The use of Inc. after a name shows that it is incorporated with the State.  Only Corporations can use Inc. in their name.  Also you don't use Inc., LLC, Corp, etc. in a fictitious name as it is misleading. ... Read Answer

You need to consult an attorney.  If there is no operating agreement then the Texas Statutes would govern, but to properly advise you it will really depend upon more facts than you provided.  For Example, what are the percentage ownerships?  What document defines the ownership? Just because someone is a manager it does not automatically make them a member.  Usually members own the business and they get to decide who the Manager will be. Good luck!... Read Answer

There's no reason you can't sign someone's name if they authorize you to do so, particularly if you disclose to the world (by using your initials) that you are signing on her behalf.  The problem would come about if they later denied that they gave you permission, and you had to prove it.  If you got something in writing from your boss authorizing you to sign her name, you should be fine, but of course if she's willing to sign such a document for you, she might as well just sign the "Disclosure and Consent" in the first place.... Read Answer

If, rather than forming an llc, you formed a c corporation, the corporation would be taxed on its profits, not the individuals.  However, the individuals would still be taxed on income they received from the corporation, either as distributions (dividends) or as compensation for services rendered.... Read Answer

I don't know whether the investor is telling the truth or not.  It depends on what your investment contract provided.  However, if you believe you have the right to any early withdrawal, and the investor refuses to allow you to withdraw, you will probably have to sue the investor to recover your money.  It is possible that a demand letter from a lawyer might do the trick, but probably not.... Read Answer

Employers are liable for their employees' torts committed during the course, and within the scope, of their employment.  If EA's techician was negligent and screwed up your computer during the course of his/her work for EA, EA would be liable for the damages you suffered as a result.  However, you should check your agreement with EA to see if there is any limitation on liability.  Contracts like that often say something along the lines of "your recovery for any negligence of our personnel is limited to $50", and these clauses are often enforceable unless you can prove that the technician was more than just negligent.... Read Answer

If you think your current lawyers are too expensive, try to find someone who will handle the matter less expensively, perhaps even on a contingency, and then change attorneys.   Your new attorney can handle getting the substitution process.  You should know, however, that even if your new attorney handles the matter on a contingency, however, you will still be responsible for expenses, such as the cost of a court reporter for a deposition, copying costs, filing fees, etc. When you look for another attorney, make sure you ask a lot of questions, because it seems to me that you did not understand the process when you hired the first lawyers (Why would you file a subpoena against a website?  How would a subpoena stop someone from doing something?  What authority would you have to force someone to stop doing something without a court order?) Your former attorneys may not have been clear enough about the costs of litigation, but you should know that it is very expensive, and that your lawyers can't always control the costs, because they depend, in large part, on what the other side does.  For example, if I write a collection etter to a debtor, and the debtor pays my client, that doesn't cost my client very much.  But if the debtor ignores my letter and I have to sue him/her/it, that will cost my client much more.  If the debtor then fights the lawsuit, and engages in discovery (document requests, depositions, etc.) that will cost my client more.  I can't control what the other side will do, and the more the other side fights, which will cost the other side money, the more it costs to fight back. ... Read Answer

It is not uncommon, in fact it probably happens more often than not, that the lease provides that it can't be assigned without the landlord's consent.  However, the fact that the clause is common does not mean that the tenant has to agree to it, nor does the landlord have to agree to unrestricted assignment.  This is a matter for negotiation, just like any other term.  If one side is adamant, the other will have to decide if the issue is so important to them that they'll let the potential deal go.... Read Answer

Assuming that you did not defraud or coerce the releasor into signing the release, that the person signing had authority to sign for the releasor, and none of the other theoretical defenses to a contract exist, probably not, but it depends on the wording of the lien release.  It is theoretically possible to release a lien without releasing the debt underlying it, although it sounds here like the lien release also released the underlying debt, which would be standard.... Read Answer