The New York Law Blog

_____ *Sean Hayes may be contacted at: SeanHayes@ipglegal.com. Sean Hayes is co-chair of the Korea Practice Team and Chair of International Practice Group at IPG Legal.  He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty.  Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw.  He has, also, received the highest rating by AVVO and other legal rating services.

New York franchisees interested in succession planning must be made aware of the effect a lifetime transfer of a business has on estate planning. Transfers without consideration during one’s lifetime are considered gifts under federal and state tax law. From an estate tax perspective, gifts reduce the estate tax threshold of the person making the gift and after death, that person’s estate would have to pay taxes on the amount of the estate that exceeds the estate tax threshold. However, with advanced preparation, a franchisee interested in succession planning can implement a plan to minimize tax burdens. Franchisees are responsible for finding a buyer when they want to sell their franchises. Succession planning may involve a franchisee identifying a successor such as a family member or key employee. In these circumstances, and depending upon the terms and conditions of the particular franchise agreement, the franchisor may be granted limited time

When buying or selling a business or any of a business’s assets under New York law, potential successor liability of the buyer is a primary concern. Successor liability means liability that the buyer of a business’s assets may have for the acts or liabilities of the seller of those assets performed prior to the purchase. Essentially, a buyer would be compelled to pay off debt that the seller accumulated prior to completion of the transaction. The general rule in New York is that the buyer of a business’s assets does not assume and is not liable for the seller’s liabilities unless otherwise expressly stated in the purchase and sale agreement. However, there are exceptions: 1. Express or Implied Assumption by Buyer. This exception requires that either the asset purchase agreement explicitly states on its face that a buyer assumes some or all of the seller’s liabilities or that some action

The common types of U.S. patents that are available to innovative New York entrepreneurs seeking to protect their valuable intellectual property fall into three common categories based on the type of invention in question: design, utility and plant patents. Most patents the average person comes across are utility patents, which involve the creation of a new process or equipment/machine. They are chiefly concerned with how an invention functions. A utility patent may be applied to a wide range of unique and innovative new products or processes. It prevents others from manufacturing, selling, using or distributing your invention. Utility patents last for 20 years running from the date that the patent application was filed. In addition to the initial patent filing fees, inventors must submit maintenance fees throughout the life of the patent in order to keep the patent’s protection. Design patents are any enhancement or adornment applied to an existing item

Drafting a non-compete agreement can be tricky if you do not consider legal factors that will make or break the document. Business in New York can be highly aggressive, and relies, in part, upon a business’s ability to protect valuable information disclosed to current and past employees. Many companies feel that implementing non-compete agreements and other contractual obligations will encourage employee retention overall and protect information should an employee leave. It is important for New York businesses to understand, however, that there are restrictions to when and how non-compete agreements can be enforced. Traditionally, non-compete agreements are used in companies and industries involving sensitive proprietary information and/or trade secrets. Non-compete agreements are commonly found across many industries regardless of size or products or services offered. They can take many forms depending on the information to be protected, including confidentiality agreements (prohibiting use or revealing information) and non-solicitation agreements (prohibiting approaching

When acquiring a small business, we recommend a more nuanced approach that contemplates matters beyond cost analysis and dollars and sense. Small businesses are the engine of American enterprise and continue to play a vital role in the economy of the United States. According to a 2012 Small Business Administration report, small businesses “produced 46 percent of the private non-farm GDP in 2008 (the most recent year for which the source data are available), compared with 48 percent in 2002.” Small businesses are also unique in that they engender loyalty from employees who take greater pride in building a business and who are personally invested in the business’s success than if they worked for a larger company. Customers can also be more loyal to smaller businesses for reasons beyond price. Given the above, here are a few of the important steps involved in purchasing a small business. What’s The Plan?

If you are looking to take your New York private business public, consider the benefits and drawbacks of a reverse merger. Often, executives and owners of successful New York businesses may wish to capitalize on that success by making shares of the business’s stock available to the public. Having a public company provides additional benefits to businesses, including expansion of  business dealings and attracting highly talented hires with offers of stock options. In a reverse merger, investors of a privately-held company acquire a majority of the shares of a publicly-held “shell company,” which is then merged with the privately-held company. To consummate the deal, the private company trades shares with the public shell in exchange for the shell company’s stock, transforming the acquiring private company into a public company. An advantage of undertaking a reverse merger is the comparative ease of transitioning into a public company. Typically, shell companies are

If you are looking to create a home-based food business in New York, then you should become familiar with what you can and cannot make, as well as the rules and regulations that exist. Before you even think about launching your home-based food business, check with your city or town to see if you will be able to comply with local zoning laws that govern where you can run a business from your home. In many cases, there are limitations onthe percentage of your square footage within your home that you may dedicate for a home business. There may even be a complete restriction on running certain businesses in your neighborhood. Obviously, this can only be addressed on a case-by-case basis, so consult with an attorney before taking any further steps. Also, before you can operate a home-based food business in New York, you must follow the rules of safe