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The partners you work with can make or break your business. As Forbes says, “Business partnership can bring you triumphant glory or catastrophic disaster.” The right match of a business partner could bring abilities that are not your strengths or infuse capital to allow your company to grow. The whole could truly be greater than the sum of its parts, to borrow a maxim coined by Aristotle.

A South Carolina business formation & planning attorney could guide you through the process of evaluating potential business partners and draw up a partnership agreement that protects you and your company. This blog will explore some methods you could use when choosing the right partner for your business.

Complimentary Traits, Talents, and Skills

Individuals rarely excel at the many and different skills it takes to build and run a business well. You should look for someone who can bring abilities to the table that you do not. For example, if you love working on product development but despise marketing or sales, you should look for someone who is great at marketing and sales rather than teaming up with another product developer.

Someone Who Shares Your Vision for the Growth of Your Company

You might want to grow your company at a steady pace with a moderate budget for marketing. Neither you nor your partner will be happy if their passion is to shoot for the moon and spend a huge amount on marketing.

A Partner with an Exit Strategy

All things, good, bad, or mediocre, come to an end. Let’s say that you want to work in the company for 30 years, and then retire comfortably. Your partner, however, wants to work until they get carried out in a pine box. It is fine for partners to have different exit strategies, but they need to talk about them upfront rather than assuming that the other partner wants the same thing they do.

Another issue you will want to discuss at the beginning is whether both partners agree on what will happen to the business when they leave the company. If you or your partner consider the company to be a family business that should stay in the family until the next ice age, there should be a discussion about that issue early on. One partner might count on selling their interest to fund their retirement.

Someone Who Does Not Have to “Win” in Every Situation

Your partner does not have to be a doormat, but it will be frustrating if they have to win on every issue. Partners, similar to spouses, need to negotiate with each other and have healthy give-and-take without either one dominating the relationship or dictating everything. You and your partner need to treat each other with respect and work out disagreements amicably.

A Partner You Trust and Genuinely Like

A partnership that is not built on trust has quicksand for a foundation. Whether justified or not, when there is mistrust between partners, your partnership could be doomed. 

You do not, however, want to be overly trusting to the extent that you expose yourself or your company to risk from the partner. You should have an ironclad written partnership agreement.

You can talk to a South Carolina business attorney about the right type of partner for your company. Contact our office today for help with your case.

Identity theft is one of the fastest-growing crimes in the United States. However, business owners need to be aware that consumers are not the only victims of identity theft efforts. Thieves target small businesses and large corporations to steal information for identity theft. A Willcox lawyer can help you protect your business from identity theft and respond to litigation regarding breaches and failure to protect client and customer information. Ways to protect a business from identity theft include:

Policies for Collecting Personal Information

Review your policies for asking clients or customers for their personal information. Limit the personal information you gather. If you do not need birth dates, Social Security numbers, and other information, don’t ask for it. Instruct employees on the proper procedures for gathering personal information, such as never doing so when others can hear and turning computer screens so they cannot be viewed by anyone else.

Protect the Personal Information You Gather

There are several steps necessary to secure the personal information a business collects. Restrict access to personal information. Only employees who need the information should have access. Vendors and customers should be limited from accessing areas that contain the personal information of customers, clients, and employees. 

Secure personal information on computers and in the office. Computers should have the most advanced and current software to prevent hacks and data breaches, including spyware, firewalls, encryption software, and anti-virus software. Limit employees’ ability to access websites that are unrelated to your business. Also, restrict or prohibit an employee’s ability to download documents, images, or other data from the internet. Require multi-factor authentication to access computers and laptops. 

Keep file cabinets and other physical storage methods locked. Limit access to documents containing personal information and the areas where the documents are stored.

Do not email or mail documents containing personal information to clients or customers. If you must include personal information, only include enough information for the client or customer to identify their personal information (i.e., the last four digits of a Social Security number).

Address when and how to provide personal information to third parties. Require that all third parties who receive personal information comply with privacy laws. Ask for background checks for third-party vendors who enter your company routinely. 

Destroy Personal Information When No Longer Needed

Destroy documents and computer files containing personal information when it is no longer needed or required to be stored. Old documents should be destroyed using a cross-cut paper shredder as a minimum. Destroy old backups and computer disks. Before disposing of a computer or hard drives, wipe them clean with special software or magnetic cleaning, even if you will physically destroy the drives and device. 

Develop a Data Breach Response Plan

Talk with our South Carolina business attorneys to ensure you understand your obligations and legal responsibility for protecting personal information. Additionally, ensure you understand the legal requirements for a data breach response plan. Your plan must comply with the law and offer your clients and customers as much protection and transparency as possible. 

Learn More During a Free Consultation With Our South Carolina Business Attorneys 

We are committed to helping you protect the business you built. Contact our law firm to schedule a free consultation with one of our South Carolina business attorneys. We offer a wide range of legal services for business owners.

A sole proprietorship is a type of business entity. One person owns the business assets in their name and assumes personal liability for the business debts. A sole proprietorship is the easiest and least expensive business entity to create. However, before you start a sole proprietorship, you should consult a South Carolina business formation attorney about the legal requirements and liability for sole proprietors. 

Benefits and Disadvantages of a South Carolina Sole Proprietorship 

Sole proprietorships have many advantages, including:

• Minimal setup costs
• Easy to operate
• Pass through taxation 
• Full ownership and control 

However, sole proprietorships also have disadvantages. The main disadvantage is the personal liability for business debts and obligations. Additionally, sole proprietors may have limited funding options. If they receive funding, they might need to pledge their personal assets as collateral for the business loan. 

Are You Required to File With the South Carolina Secretary of State for a Sole Proprietorship? 

Most business entities are required to register with the South Carolina Secretary of State’s Office. However, sole proprietorships and general partnerships are not required to register. Therefore, you can start a sole proprietorship without filing any documents with the state.

However, you might need other paperwork and documentation to become a sole proprietor. Depending on your business type, you may need a tax identification number, insurance coverage, workers’ compensation insurance, and business licenses. 

The basic steps for creating a sole proprietorship in South Carolina are:

• Select a business name (many sole proprietors operate under their personal name or a “doing business as” or d/b/a)
• Create a business plan
• Determine whether you need an EIN (employer identification number) or whether you can use your Social Security Number
• Verify the type of insurance and bonds required
• Understand personal liability and purchase liability insurance to protect yourself
• Determine whether you need a business and/or other licenses
• Speak with a tax professional regarding tax reporting and liabilities
• Determine whether you must pay sales, employment, or other business taxes

A South Carolina business attorney can guide you through the steps to set up a sole proprietorship. They can also review other business entities with you that could provide more advantages and better protection for your company. 

Protecting Yourself Against Personal Liability for a Sole Proprietorship in South Carolina 

Because you bear sole legal liability for business obligations, you may want to consider purchasing insurance coverage that covers your business obligations. Personal liability insurance might not protect you if you are sued for a business obligation. 

Furthermore, all profits and losses are reported on your personal income tax return, so you may also need to consult with a tax professional before you begin the business. Accurate books and records are essential during tax time. A tax professional can also help you set up accounts and procedures for handling payments and taxes for employees and independent contractors. 

Learn More During a Free Consultation With Our South Carolina Business Attorney 

Setting up a new business is exciting. However, you need to ensure that you comply with the law, choose the best business entity for your company, and protect yourself from personal liability. Our South Carolina business attorneys will help you with all matters related to starting a new business. Contact us today to schedule your free consultation.

This blog will discuss why you need a non-disclosure agreement if you have a business. A South Carolina business contracts attorney can talk to you and draft a non-disclosure agreement (NDA) tailored to your specific needs. You do not want to use a generic form for this important document.

What a Non-Disclosure Agreement Does

A non-disclosure agreement (NDA) identifies what information needs to get protected by the document and what is not confidential. You might be surprised at the assumptions your employees or others might think are not confidential. 

If you clearly identify what information these individuals can use or share, as well as what the NDA protects and prohibits from disclosure, they cannot claim that they did not know. People tend to work better with well-defined boundaries rather than uncertainty.

When a person signs an NDA and later violates it, they are guilty of a breach of contract. The NDA can specify the legal consequences of such actions. 

Situations When an NDA Could Protect the Employer/Business Owner

Here are some of the common situations in which you might want to have someone sign an NDA:

• When you hire a new employee, you will want to make sure they understand that your proprietary information is not for them to sell to your competitors and use for their own purposes. Many companies have developed valuable ways of working that are proprietary. You might have software custom-made for your business. Customer lists and details are confidential. Third parties could make improper use of this data, so you will want to protect it with an NDA.
• When employees leave their employment with you, it can be beneficial for them to sign an NDA. Also, when your company develops new information or processes, an updated NDA could be useful to protect the company.
• When you bring on new investors or partners, they will get access to some confidential or proprietary information. Although they might have a legal right to access this data, you will want to nail down what they cannot share with others or use for their own purposes. 
• Many products involve financial, technical, or other confidential or proprietary information that should get protected before the technology or product gets sold or licensed to the intended user. An NDA can ensure that the user understands the allowed use of that information as well as which uses are prohibited. 
• Selling a company or merging with or acquiring another business involves dealing with multiple third parties. Each of these parties, like agents, brokers, and financial entities, should sign an NDA to protect your company from the unauthorized appropriation of your company’s proprietary or confidential information.
• Even bringing on new clients can subject your company to the risk of misappropriation of your confidential or proprietary information by those clients. Some companies hire “secret shoppers” to pose as clients of their competitors to try to gain access to such valuable information.

This is not an exhaustive list of every circumstance in which you might benefit from the protection of an NDA. You will want to talk with a South Carolina business attorney about your company’s unique risks and develop a strategy to protect the fruits of your hard work with a non-disclosure agreement. Contact our office today for help with your case.

When we hear about business fraud, we assume that the business was guilty of committing fraud on a consumer. However, businesses are also victims of fraud. Business fraud costs companies billions of dollars in losses each year. 

If your business is the victim of fraud or misrepresentation, it is crucial that you take immediate steps to stop the fraud and pursue legal remedies for compensation of damages. Our South Carolina business attorneys can help you pursue claims to hold the responsible parties accountable for their fraudulent acts.

How Do You Prove Business Fraud in South Carolina?

Business fraud includes false representations of a material. The misrepresentation can be intentional or negligent. Business fraud occurs when:

• A party knows that a fact is untrue or fails to use reasonable care to determine if the fact is true or untrue;
• The party misrepresents the fact to a second party as being true; 
• The misrepresentation is material or relevant to the transaction or contract; 
• The misrepresentation is made to induce the second party into action or inaction; and,
• The second party relies on the false statement and suffers harm because of that trust. 

For example, a company falsifies documents and financial records to convince another company to enter a partnership or merger. Another example might be that a seller represents their ability to perform contractual obligations or hides a problem with a product. 

A company could be defrauded when employees falsify expense reports to obtain reimbursement checks or skim money from customer payments to the company. Civil fraud could occur when a party intentionally withholds relevant information to get a company to enter into a contract or perform services. 

Examples of Ways Companies are Defrauded in South Carolina 

Fraud can occur in many ways. Examples of business fraud include, but are not limited to:

• Insurance fraud
• Mail fraud
• Bank fraud
• Wire fraud
• Fraudulent conveyance
• Employment-related fraud
• Securities fraud
• Embezzlement
• General fraud

Regardless of the type of fraud, the result can devastate a company. The company could sustain a significant financial loss because of the fraud. Furthermore, the company might suffer from harm to its reputation if customers or investors become aware the company was defrauded.

If Your Business Was Defrauded, You Could Pursue Litigation Through the Courts 

A business lawyer can help you seek compensation for damages caused by business fraud by filing a civil lawsuit. Depending on the circumstances, you could receive compensation for the actual monetary losses caused by the fraud, reimbursement for attorneys’ fees and costs, and other damages. A judge could order the other party to pay punitive damages as a way to punish the party who committed fraud. 

Contact Our South Carolina Business Attorneys for a Free Consultation 

Our experienced business lawyers at Willcox, Buyck & Williams, PA, can help you take steps to protect your business now and in the future. If you experience legal problems, we are here to fight to protect you and your company from liability. Contact us today to schedule a free case evaluation with a seasoned South Carolina business attorney.

Whether you are starting or investing in a business, you need to ensure the shareholder agreement protects your rights and interests. Without a shareholder agreement, the parties could face time-consuming and costly disputes as the company grows. An experienced South Carolina business contracts attorney can ensure your shareholder agreement has the essential elements to reduce the risk of conflicts and confusion as you build your company.

What Is a Shareholder’s Agreement?

A shareholder is someone who owns an interest in a company, usually as a stockholder. A shareholder agreement or stockholders’ agreement defines the relationship between the shareholder and the company. A shareholder agreement is a written contract that describes or defines:

• The rights and roles of a shareholder
• How shares can be purchased and sold
• The obligations of the shareholder to the company
• How the company will be operated
• What happens if a shareholder divorces, dies, becomes disabled, or files bankruptcy 
• How the company makes important decisions 
• The process for resolving disputes between shareholders 

Whenever more than one person invests money in a company, the company should have a shareholder agreement. Even if family members and friends own all shares, the company and the shareholders need an enforceable contract to protect themselves. 

What Are the Key Elements of a Shareholder Agreement in South Carolina?

A business lawyer drafts a shareholder agreement that addresses specific issues that the shareholders and the company might encounter. The agreement can address special circumstances for an individual business, but the agreement needs to include key clauses.

The key elements to include in a shareholder’s agreement are:

• A preamble to identify the parties to the shareholder’s agreement
• The number and type of shares the company is authorized to issue
• A capitalization table defining the equity capitalization of the company 
• The rights of shareholders to appoint and remove directors
• The rights and obligations of directors and managers
• The matters that require shareholder approval, including any matters that require unanimous consent
• Voting and quorum requirements, including a deadlock clause
• The rules for transferring, selling, or purchasing shares, including rights of first refusal and what occurs in the event of the death of a shareholder 
• The procedure and requirements for holding meetings
• Confidentiality and non-compete clauses 
• The rights of minority shareholders 
• How profits and losses are distributed among shareholders
• The procedure for valuing each share of the company 
• “Boilerplate” clauses defining the entire agreement and severability 
• The process and requirements for amending or terminating the shareholder agreement 

The terms and conditions of a shareholder’s agreement ensure that the shareholders are treated fairly. The agreement also protects the business by defining how significant decisions are made and how the company will be operated. 

It is not wise to use a shareholder agreement template you find online. The templates may not have the language necessary to protect your rights and interests. Furthermore, shareholder templates might not comply with South Carolina laws governing corporations, partnerships, and associations. Consulting legal counsel is the best way to ensure your shareholder agreement has all the elements to protect all parties and comply with state laws. 

Contact Our South Carolina Business Attorney for More Information 

Our South Carolina business attorney helps you protect your business interests and investments. Contact us to schedule a consultation with our attorney to discuss all your business matters.