Business Law

Davidson, Sochor, Ragsdale & Cohen, LLC offers sophisticated legal services to business owners of all types and sizes. We draft documents and provide regulatory advice regarding the organization, operation, and sale of all business entities. Our lawyers welcome inquires from potential clients in need of experienced, dedicated corporate and business law counsel and representation.

Our clients range from small retail establishments to multi-million dollar entities. We provide business document preparation and legal advice of the highest possible caliber with personal attention and prompt service.

Business Tax Matters

Our lawyers have substantial practical experience in all aspects of commercial tax law. In determining the appropriate type of entity to be organized with respect to a new business or how to purchase, sell or reorganize an existing business, our corporate lawyers will structure the transaction to create the most optimal tax impact while attaining your business goals.

The goal of all our lawyers is to fulfill your business law needs. We want you to feel confident that your matter is being handled properly and efficiently, to be kept informed of its status, and to have an attorney at the firm who is responsible and knowledgeable for all your matters.

The majority of the businesses in the United States are close corporations. Because close corporations usually employ the shareholders, these companies generally have a more relaxed management style. The downside is that this management model puts the minority shareholders in a situation where they quickly can be faced with “squeeze out” of “freeze out” tactics, that typically result in termination of employment with that company. Having a properly drafted operational agreement can prevent these types of disputes from developing, but if conflicts do arise, a qualified lawyer will ensure that all possible legal avenues are pursued to help the minority shareholder receive fair treatment and compensation under New Jersey law.

Buy-Sell Agreements

Buy-sell agreements protect a business from its owners, specifically their deaths, disabilities, divorce, disputes, bankruptcies, and creditors. You find buy-sell provisions in a buy-sell agreement, a partnership agreement, a shareholders’ agreement (concerning a corporation’s shareholders) or an operating agreement (concerning an LLC’s members).

  • Death.  If a shareholder dies, the company usually buys his/her shares from his/her estate.  This is fair to the surviving family because they usually want money not shares in a illiquid small business. This is fair to the company because you don’t want the deceased shareholder’s spouse or son to show up and announce himself as your new partner. Usually you pay a death buy-back in one lump-sum, especially using the proceeds of life insurance, or paid out over a period of time.
  • Disability. Similar to death (except without the finality) if a shareholder becomes disabled, the company buys his shares.
  • Divorce. The divorcing shareholder buys out his spouse’s entire equitable property interest in the company’s shares. This is done in the divorce proceedings.
  • Disputes. Sometimes two shareholders just can’t get along. One technique used often to deal with this situation, you use “shotgun” procedures. This means that, between the two warring shareholders, the first shareholder offers to buy out the second shareholder, and the second shareholder has the choices, either be bought out or turn around and buy out the first shareholder on identical terms (i.e. I cut, you choose). Either way, a price is fixed for the buy-out, and one of the warring shareholders leaves the business.
  • Bankruptcy; Bad Transfers. If a shareholder transfers shares in violation of the shareholders agreement or goes bankrupt, the company can purchase all of this shares to keep the shares away from his creditors.  This serves an asset protection function.