Texas Business Legal Questions

If you operate the LLC properly, filing the proper forms (particularly tax forms) and keeping its operations and finances separate from your own personal doings, you are not, as a matter of law, personally liable for the LLC's obligations.  It's not that hard; millions of individuals maintain millions of small corporations and llc's.  The limitation on liability is the main reason why people incorporate or form llc's, and one of the main reasons such entities exist.  Many people find the protection from personal liability sufficiently important that they form llc's or corporations as a vehicle to conduct business despite the hassle, regulation, and (in some cases) double taxation. There are two caveats.  First, if you personally commit a tort, you personally can be liable, whether you use an llc, corporation, or not.  Thus if, in the course of your employment you run over someone, even though the llc is liable, you too are personally liable (your auto insurance, or the llc's auto insurance, would usually cover it.)  However, if the llc takes out a bank loan, and you don't personally guarantee it, you are not personally responsible to pay it. The second caveat is that those you do business with also know that owners are not personally liable for an llc's obligations, and they may require you to personally guarantee those obligations before they will do business with you.  For example, the bank probably will not give the llc a loan without a personal guaranty; a landlord probably will want you to personally guarantee the LLC's lease before he/she/it will rent to the LLC. ... Read More

I have a few questions here: how long is the lease term? Is your wife the only tenant in the building? If not, does he treat the other tenants the same way? What is his reasoning for wanting a background check on the employee? What kind of business does your wife operate? Are the changes the landlord makes to the lease made in writing or are these verbal requests? Any change to a written lease must be in writing and signed . It may be beneficial for your wife to hire a lawyer to handle communications with the landlord to protect her rights under the lease agreement. ... Read More

I have some questions here. Did your son and his partner have a written agreement? Also, did your son or the other partner promise to repay you within a certain time frame? If the answer to either of those questions is yes, you may have a breach of contract claim against the partner and/or your son. Also, how long ago did this happen? More detail would be helpful in determining what your rights are in this case, but it sounds like your son was the surety (or guarantor) on the loan. I just need to make certain what you allowed him to use on your cards was a loan (not a gift) and that your son and/or the partner promised you would be repaid.... Read More

What do the shareholder agreement, operating agreement, bylaws, and/or certificate of incorporation provide?  If none of them speak to the issue, it would be governed by statute.  I am not familiar with the corporate laws of Texas (assuming that the business is incorporated in Texas; many businesses are incorporated in states other than where they operate), but most states require such drastic transactions to be approved of by a super-majority of shareholders, often 2/3.  If the shareholders are deadlocked, you should be able to petition the courts to dissolve the corporation.... Read More

The question is really more a business issue than a legal one.  Both forming an llc and buying liability insurance could insulate you from personal liability, but will cost money.  The question is whether the money you spend is worth it (the answer could be different for each option).  This obviously depends on how much it costs you to form and maintain an llc, and to purchase and maintain liability insurance.  Other factors you should be concerned with are what is the probability of any liability arising out of the performance of your services.  Without knowing very much about your business, it's hard for me to assess the potential for liability (the largest risk it seems to me is that you will have a car accident in the course of operating your business, but that risk could be covered by automobile insurance, no need fora special policy), but it doesn't seem very high to me.  You also have to assess what you have to lose.  What assets do you have outside of your business which could be at risk?  Also, you need to think of your own appetite for risk.  If you are uncomfortable taking any risk at all, however small, of losing what you have due to a business-related obligation, you should form the llc and take out insurance. Another way to protect yourself from liability is to include a limitation of liability clause in the form contract you have with your customers, something along the lines of limiting the customers' recovery for any negligence or breach of contract on your part to a refund of the amount they have paid you for your services.  Such clauses may not always be enforceable under all circumstances, but it costs you nothing to include such a clause in the contract.... Read More

If you are talking about an investment (where you share in the profits and losses of the business) as opposed to a loan (where you loan the business money and get repaid, with interest, but get nothing extra if the business does especially well and are still repaid if the business loses money) you can pretty much structure it however you want. What is the current structure of the business?  Is it a corporation?  If so, the owner just has to sell you some stock.  If you are supposed to own 25% of the business in exchange for your $5,000, he would sell you 25% of the stock for that $5,000.  A similar method would work if the business was an llc.  If the business is a sole proprietorship (that is, it is not a separate legal entity like a corporation or llc, but is just owned and operated by an individual), you could structure it in other ways.  For example, you could contract for you to invest $5,000 in exchange for a percentage of net profits (which you should carefully define so you each know what revenues you are to share in and what expenses are to be deducted "off the top"; although you used the term "revenues" in your email, revenues don't mean that a business has any profits to share with investors.) As for how and when you get paid, that's up to the two of you to agree on.  There are a lot of issues that the two of you should agree on as well.  For example, are you going to be working in this business?  If so, what is your salary going to be?  Is the current owner going to get a salary for working in the business and, if so, should this amount  be deducted from revenue for purposes of calculating the profits to which you are entitled to share?  Who calculates the net profits in which you are entitled to share?  Suppose the other person disagrees with the calculation?  Does that person have the right to audit the books?  If so, who pays for the audit?  Do you both get a say as to how the business should be run?  If so, how will you resolve any disagreements?  What about any profits and/or losses which accrue before you invest - do you share in them?  How about creditors of the business existing before you invest - do payments to them come out of your profits?  If the business is not a separate legal entity, how will you shield each other from claims made by  your individual creditors, having nothing to do with the business?  Etc, etc. ... Read More

You can always be sued, by anyone for anything, but that doesn't mean that you will lose the suit. If the owner of the photo gives you the right to use the photo, and that person has the capacity to consent (I add this because you are 16; if the person who sent you the photos is also a minor, he;she may not have the legal capacity to consent), and you only use the photo in the manner to which the owner agreed (for example, if the owner gives you the right to use the photo in some artwork you are creating, that doesn't mean you have the right to use it in an advertisement, or if you induce them to send you the photos by telling them you are going to use the photos in a video tribute and then make a negative video instead), you have the right to use it.  You  have to be careful that the person giving you permission owns the legal rights to the photo in the first place.  In some scenarios, the person who sent you the photo may not have those rights.  For example, he/she may not be the photographer, or may have given the rights to use the photo exclusively to someone else, etc. ... Read More

She did not wrongfully fire you; absent a contract (e.g. "employee can only be terminated for good cause which is defined as ..." or statute (e.g. employee can't be terminated based on race, religion, gender, etc.) limiting the grounds for termination, you can be fired at any time for any reason.  However, if your employer lied about you and those lies caused the new employer to revoke her hiring of you, and other prospective employers not to hire you, your former employer may have committed the following torts: (a) slander (slander is oral defamation; libel is written defamation); (b) tortious interference with contract (your hiring by the second lady); (c) tortious interference with prospective business relations (employment with the other prospective employers your former boss scared away from hiring you); and (d) prima facie tort (basically a catchall for malicious actions which cause damage when no other theory will fit - as the other theories do seem to fit, this one probably won't fly).... Read More

I would advise strongly against using the university's name in your web domain. That name may be considered a trade or service mark, and they may sue you for infringing on the use of that name. The University of Texas has successfully sued an unrelated business for using its marks. See here: http://www.lexisnexis.com/legalnewsroom/intellectual-property/b/copyright-trademark-law-blog/archive/2011/02/23/attack-of-the-300-foot-tower-university-of-texas-files-trademark-suit-to-protect-campus-landmark.aspx    ... Read More

The answer to your question depends on a few things. First, when did you sign the shareholder non-compete agreement? If it was more than two years ago, you should be fine if that was the time period specified in the agreement. As a general rule, non-compete agreements cannot be used to limit you from being able to earn a living, and a court would look at that agreement very critcally. A valid non-compete agreement needs to be reasonable in scope, geography, and time. Without specific limitations in place, it may not be enforceable against you. ... Read More

It looks like you and your former employer entered into an agreement to store the rig at your home for $200 per day.  Since that was four months ago, he owes you over $24,000 for storage of the rig. Because he is going through a divorce, that rig may be community property that the court must decide who it rightfully belongs to. However, he made an agreement with you and has not honored it. I would recommend having a demand letter sent to your employer to settle this dispute so that you are paid for the storage and the rig is relocated. If he is unwilling to respond to a demand letter, you will need to file a breach of contract lawsuit against him in district court to pursue collection of your money. Your employer and his wife are technically unable to transfer the title to you during the pending divorce proceedings because it likely belongs to both of them and it has not been decided who will ultimately get the rig in the divorce. ... Read More

You need to wind up the internal affairs (pay outstanding debts, liquidate inventory, work out any outstnanding money due to any existing business partners, etc.). From there, you need to hire an attorney who specializes in business law to assist you in filing the appropriate certificate of formation with the Secretary of State of the state where your business was originally incorporated. ... Read More

It seems to me that your question is whether the lender had the right to repossess and re-lease your car, which nobody can answer without knowing more information about the circumstances under which the car was repossessed; it has nothing to do with two loans on the car.  Your lender, or its assignor (many motor vehicle loans are assigned by the original lenders to other companies) loaned you money, probably to purchase the car, and kept a security interest in the car to secure repayment of the loan.  This is very much like a bank lending you money to buy a house, and keeping a security interest in the house (a mortgage) to secure repayment of that debt.  The lender claims you didn't pay, and repossessed your car, just as a bank would foreclose on an unpaid mortgage.  The lender then leased the car to someone else, just as the repossessed home would be sold to somebody else.  So the questions are (a) were you in default on the car lease; (b) if so, did the lender have the right, under your financing agreement and Texas law (unfortunately I can't help you with either of them), to repossess the car; if so, did it have the right, again under your financing agreement and Texas law, to re-lease the car.  Assuming the answer to all of the above is yes, it seems to me that there is still one more very important question - does the lender have to apply the money it receives from the second lessee to the balance of your loan, thus reducing or eliminating your debt?  Again, you would have to check your financing agreement and Texas law, but the answer may be yes.  After all, when a bank forecloses on a mortgage, the money from the foreclosure sale is applied to the mortgage debt (after first deducting fees and expenses of sale).  The car was your property, not the lender's.  It may well have the right to repossess the car and sell it in order to be repaid, but not, it seems to me, to get paid by both you and the new lessee.  Moreover, after the lender is repaid, any additional money its gets for the car should be yours.... Read More

It is probably too late now, but what you could have done is have anyone to whom you were going to make a presentation sign an agreement beforehand that they will not use any of the ideas you present and will keep them confidential unless you agree otherwise.  Also, to the extent that your ideas involve any trademarks, copyrights, and/or patents, you could have registered them.... Read More

Bruce - the oral agreement is likely unenforceable.  But all is not lost, I would need to see the documents to see if there is a way to work things out.  You however have the working knowledge and that is a large card you are controlling. The matter should be mediated to a resolution.  This partner is someone you have had a 15 year relationship with and if he won't do the right thing now is the time to split the sheets. Roger Yale  ... Read More

Suing a company from China that has no assets here in the US is possible but pointless since without a Chinese judgment, assets in China will not be subject to execution to satisfy any judgment Attaching accouts payable to China while still present in the US is a pre-internet alternative very difficult to acutally achieve.... Read More

I am not sure what you mean by a "nondisclosure state corp."    I can certainly assist you with forming a "c" corporation, an "s" corporation as well as an LLC.  It would probably be a good idea to sit down with me in my office and discuss what you are trying to accomplish with these entities and then discuss the differences between all of them. Each entity does provide some form of asset and personal protection. Please call my office to schedule an appointment. 713-228-1515 Gary Langford ... Read More