Five Ways to Limit Your Liability
January 31, 2019
1. Structure your business accordingly. To protect your personal assets, such as your car, home, and bank accounts, from potential lawsuits involving your business, it’s often advisable to structure your business as a limited liability company (LLC) or corporation. Unlike sole proprietorships or partnerships, both LLCs and corporations have the added benefit of shielding you from personal liability when certain actions are taken by the company; instead, only business assets would be subject to liability. . . .
Four Tips for Master Supply Agreements
June 25, 2018
Whether a business is just beginning and needs the necessary supplies to start production, or an existing business is simply looking to renegotiate terms or find a new supplier, business owners face a specific set of challenges when figuring out how to best deal with supply agreements. In the aggregate, master supply agreements, or MSAs, are generally contracts that come into existence when a company maintains several contracts with the same supplier, and therefore seeks to streamline the process by merging them into a single agreement. . . .
What to Consider When Buying a Business & Some Recent Changes That Can Help
April 3, 2018
Whether you’re interested in expanding your existing business or looking to get in to an entirely new sector, purchasing a business comes with a complex set of issues, not the least of which is financing. After most formalities have been dealt with—such as purchase price, investigating the inner-workings of the business, and so forth—the question remains as to how the necessary money needed to purchase the business will be acquired. If the money is not on hand, or available via family and friends, you will most likely have to go through the process of getting a loan from a traditional lending institution, such as a bank or credit union. . . .
Personally Identifiable Information
December 31, 2017
In recent years, as an increasingly large amount of our information is stored on computers and throughout the internet generally, the notion of cyber security, especially in relation to Personally Identifiable Information (PII), has become a progressively important and even daunting concept. Under Minnesota statute 325E, “personal information” means an individual’s first name or first initial and last name in combination with (1) their social security number, (2) their driver’s license or MN identification card number, or (3) their account, credit, or debit card number when in combination with any required security code or password that allows someone access to an individual’s financials. . . .
Key Areas of Concern When Dealing with a New Vendor
September 30, 2017
Whether you are a well-established company or just starting out, outsourcing certain services may be in your best interest; big box retailers, for example, need not concern themselves over the creation of a customer-facing app to sell their products and all of the intricacies that accompany the technological world. In order to create said app, or do virtually any other service for that matter, businesses often hire other companies better suited to do so, whose job it is to specialize in such matters. When engaging in these outside vendor hiring processes, it is important to take into consideration a multitude of different factors, such as reliability, insurance, assurances, and termination rights. . . .
Beware the Oxford Comma
July 9, 2017
Upon first glance, the fact that the US Court of Appeals for the First District recently upheld an appeal by five Maine delivery truck drivers of dairy products may not seem like a huge deal—it was essentially held that the drivers in question were entitled to overtime pay, something that their employer had thought they were exempt from because of Maine’s applicable law. However, the reasoning behind the actual irrelevance of the law in the circumstance lay within its use, or rather lack thereof, of a comma separating the last two items of a list, otherwise known as an Oxford comma. Though this case did not take place in Minnesota, the lesson it provides is manifestly true in all areas of contract law and drafting, that being: grammar truly does matter. . . .
Five Things to Think About When Dealing with Purchasing Contracts
March 30, 2017
1. Determine what factors are most important to you and your business. Whether it’s price, quality, terms of payment, or otherwise, it’s important to remain introspective into your own company and discover what is truly the most important factor in your own circumstance. Undoubtedly, price will oftentimes be the most common determinative factor, but it’s often helpful to list out all factors in order to determine the best supplier fit. If, for instance, prices are relatively the same across suppliers, but the delivery schedule of one is much more favorable to your business over another, it’s important to note and prioritize that. Likewise, if a price is suspiciously low, you may want to look at other important factors to you to make sure that such a supplier is not taking shortcuts elsewhere. Creating a list of business go-to items will help the legal analysis for the contract. . . .
A Crash Course in Letters of Intent
March 18, 2016
What is a letter of intent?
A letter of intent is essentially a document that lays out basic information about a particular future transaction. Typically, the goal of a letter of intent is to show that the parties have agreed to negotiate the final transaction and have come to some level of mutual understanding on certain terms of that transaction, given the current information. Depending on the situation, the letter of intent may also create an obligation of exclusivity, lay out the process for due diligence or inspection, and provide structure for future negotiations. In many circumstances, letters of intent are similar to memorandums of understanding or term sheets, but there are obviously differences in how/when they are used. Since letters of intent will often have specific deal terms or purchase prices, people can get nervous about signing the letter before having the chance to complete due diligence. In the following paragraphs we discuss whether these letters are binding, and what that means for you and your business.
Three Steps to Improve Your Indirect Procurement Process
December 31, 2015
When running a business, it’s easy to focus on your cost of goods sold or salaries when looking to cut costs, but indirect procurement expenses can be just as large of a driving force behind the company cost structure. In this article, three simple steps are provided to reduce unnecessary expenses associated with indirect procurement and to help you keep these processes running efficiently. As in many process improvement efforts, the first step is to take inventory of the current status of your indirect procurement operations. The second step is focused on simplifying your processes, and the third step looks at ways to cut purchase prices.
Step 1. Evaluate Current Processes
In order to understand the best ways to improve a process, it is crucial to understand the starting point. Evaluating how your company currently handles indirect procurement, using quantitative data whenever possible, will illustrate any positive or negative patterns, and will provide a useful benchmark for evaluating future performance.
Four Issues to Consider When Signing an Indirect Procurement Contract
November 7, 2014
All businesses conduct indirect procurement. For some, indirect procurement consists of purchasing office supplies from an outside vendor. For others, indirect procurement involves the outsourcing of customer relationship management, order processing, and other services. Unlike direct procurement, which comprises the bulk of a business’ sourcing activities and involves purchasing raw materials needed for the production of certain goods and services, indirect procurement is the sourcing of goods and services that indirectly facilitate business operations.
Even though each company’s level of indirect procurement varies, each company can benefit from strategic language in indirect procurement contracts. After carefully assessing company needs in terms of quantity, quality, timing, price, and other variables, business leaders should negotiate with procurement providers (hereinafter “providers”) to ensure the contract terms protect production interests and ensure operational cohesion. To do so, business leaders should pay special attention to the areas of representations and warranties, indemnification and limitation of liability clauses, fulfillment terms, and termination rights.