| Read Time: 5 minutes | Business Law

6 Questions to Ask a Lawyer When Starting a Business

Thinking about starting a business can be exciting. But there is no doubt that getting a business up and running also requires a lot of hard work. And while you may be tempted to do it all on your own, it never hurts to ask for help from a professional—in fact, doing so can ease much of the stress and uncertainty that comes with formally setting up a business. Before you start your own business, there are a number of things you should know. But don’t feel like you have to figure it all out on your own. Instead, contact an experienced business law attorney today to help you get the answers and assistance you’re looking for. The team at Massingill Attorneys & and Counselors at Law can help you at every step along the way.  As you get started, here are six questions to ask a lawyer when starting a business.  1. Can I Name My Business Whatever I Want? For many people who want to start a business, what to name the business is one of the first decisions they will make. However, formally selecting your name is not always so simple.  Sometimes, an aspiring business owner may have a name in mind only to discover that it is already being used by another business in the area. And even if your proposed name is not identical to any other business names, you still may be precluded from using it if it is not sufficiently distinguishable from other names.  This can certainly complicate matters. Thus, before you set your business name in stone, first consult with a small business attorney who can help you determine whether your desired name is available.  An experienced lawyer can help you run a name availability search to ensure that your proposed name is available and distinguishable from other names already being used. 2. What Do I Do If My Desired Business Name Is Available But I’m Not Quite Ready to Move Forward? If your proposed business name is still available, this is great news! But sometimes, you may not be ready just yet to take next steps in formally setting up your business. In this scenario, you may be wondering whether there is anything you can do to reserve your business name. Fortunately, the answer to this question is yes.  In fact, the Texas Secretary of State permits online reservation of names for any type of filing entity. A business entity reservation is effective until the 121st day after the application is accepted. This can give you some extra time to prepare for next steps while also keeping your preferred name on hold in the interim.  3. What Type of Business Entity Should I Select? There are many types of entities to choose from as you look to form your Texas business. These include:  Sole proprietorships,  General partnerships,  Corporations,  Limited liability companies (LLCs),  Limited partnerships, and  Limited liability partnerships. Each one will have its benefits and drawbacks. But which entity type is right for your business? The type of business entity you select will depend on a number of factors. Some of the factors to take into consideration include:  Whether you plan to have employees;  Desired tax treatment for the entity;  Whether you plan to own and operate the business yourself or with one or more business partners; and What personal liability protection you want.  Of course, this is not an exhaustive list. Depending on the needs and desires of your business, there may be many other factors you’ll want to consider as well as you select your entity type.  Give our Texas business formation attorneys a call today to discuss what entity type might best fit your business’s needs.  4. What Formation Documents Do I Need to Get Started? To set up your new business, there are certain formation documents you will want to have prepared. In many cases, you will need to file what is called a certificate of formation with the secretary of state to formally create your business entity. Examples of other documents you might consider preparing include bylaws for a corporation or an operating agreement for an LLC.  While these are not required, it is highly recommended to have these types of documents in place for your business. They will allow you to more clearly delineate the business entity’s policies and procedures. While these types of formation documents can seem intimidating, they are crucial to the success of your business. Thus, make sure to work with an attorney who can help you understand and create the documents that you will need.  5. Are There Any Other Documents I Will Need for My Business?  No matter what type of business you plan to create, one thing is certain—there will be various documents and contracts that you need throughout the life of your entity. In fact, the key to most successful businesses is the existence and implementation of legally sound contracts and agreements. Examples of contracts that are found in many businesses include:  Employment contracts,  Independent contractor agreements,  Severance agreements,  Nondisclosure agreements,  Noncompete agreements,  Partnership agreements,  Buy-sell agreements, Sales contracts,  Security agreements,  Property and equipment lease agreements, and Indemnity agreements. As these are legally binding agreements, it is always best to have any necessary documents prepared by an experienced legal professional. Failure to do so could result in disputes, and even lawsuits, in the future. 6. Should I Protect My Business’s Intellectual Property?  The short answer is absolutely! Protecting your business’s intellectual property is essential to its growth and success moving forward. Many people mistakenly believe that they do not need to protect their intellectual property until their business is more well-established. However, this is not the case at all.  Protecting and safeguarding your valuable intellectual property can be a great way to gain goodwill in your business and better prevent infringement by bad actors later on.  It’s never too early to start protecting your IP rights. Our attorneys can help you register the trademarks and copyrights that will...

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| Read Time: 5 minutes | Estate Planning

Why Estate Planning Is Important in Texas

Many think that estate planning is only for the ultra wealthy, but that is simply not the case. If you have assets, you have an estate. If you have an estate, you need a plan. Below we will explain why estate planning is important in Texas. What Is an Estate Plan? An estate plan is a set of documents that directs others on managing your assets during your lifetime and at death. Part of estate planning includes developing instructions on your financial and medical care if you are unable to make those decisions. Your estate plan may comprise a combination of the following documents: Last will and testament, Advance power of attorney, Living will,  Medical power of attorney, and  Trusts.  At Massingill Attorneys & Counselors at Law, our goal is to make sure your intentions are clearly defined in your estate plan. We achieve this by incorporating multiple document types.  Last Will and Testament A will is your final chance to speak. This legal document communicates your wishes and instructs your executor on how to distribute your assets. Your will is only effective once you die, and only assets solely in your name (also known as probate assets) are subject to the terms of your will. With this document you can do the following: Gift specific property, cash, or other assets; Appoint your executor; and  Designate a guardian for any minor or disabled child.  Texas has its own unique requirements for a will to be valid. That is why it is advantageous to consult with an attorney to assist you in creating your will.  Financial Power of Attorney A power of attorney is a document that authorizes another person to manage your financial affairs on your behalf. There are several types of powers of attorney that are available based on your needs and goals. Powers of attorney can be broad or limited in scope and can take effect immediately or when a certain event occurs, such as incapacity.  A financial power of attorney can help protect you from financial abuse if you become incapacitated. Texas has a statutory form available, but it is best to speak with an attorney to fully understand the implications of the document before you sign. Living Will A living will, also known as an advance medical directive, provides end-of-life instructions. This document is meant to prevent confusion or disagreement among your family and health care providers with respect to how you want to be treated before you die. Typically, you would decide on the use of artificial hydration and nutrition, the use of breathing machines, whether you want to be resuscitated, and whether you want to be an organ/tissue donor. Medical Power of Attorney A Texas medical power of attorney allows you to appoint an agent to make health care decisions for you if you are unable to do so. Since the term “health care” includes a broad range of medical services, you may limit the agent’s power to only certain medical decisions. The document only goes into effect when a physician certifies that you lack competence to make health care decisions. The health care professional must follow your agent’s instructions. Trusts Trusts are used for many reasons, but most commonly to pass assets to beneficiaries outside the probate process and protect against creditors. Trusts come in a variety of types, including living trusts, testamentary trusts, Medicaid trusts, charitable trusts, special needs trusts, and life insurance trusts.  These estate planning vehicles are attractive because the beneficiaries typically get their inheritance quicker and cheaper than through a will. With proper use, trusts can also provide certain tax advantages to both the testator (the creator of the trust) and the beneficiary. Why Do I Need an Estate Plan? Estate planning is important for many reasons, from protecting your hard-earned assets to providing for your family to minimizing taxes.  Peace of Mind Planning for your death may seem like a morbid task. It is. Discussing how you want to die and who should get your car may not be fun, but it is rewarding. Knowing you are making sound decisions about your assets and providing for your family should bring you and your loved ones peace of mind. Tackle the tough questions and decisions now, so your family is not left scrambling, during an already difficult time, to figure out what to do with your estate. Protect Your Assets Without an estate plan, you and your assets are not protected. You have worked hard for what you have, so take the time to shelter it from creditors, greedy family members, or divorce proceedings. As mentioned above, estate planning is effective during your lifetime. The use of medical and financial powers of attorney can protect yourself and your assets from abuse. By incorporating wills and trusts into your estate plan, you continue to provide protection even after your death. Ensure Your Assets Go to the Intended Beneficiaries If you do not write your own will, Texas will do that for you. Under Texas intestate succession laws, your probate assets go to your closest living relatives. This highlights the importance of estate planning since your assets could pass to someone you may not want them to. Depending on who is surviving at your death, Texas will distribute your estate as follows:  If children survive, but not a spouse, then children inherit; If a spouse survives, but no children, parents, or siblings, then the spouse inherits; If parents survive, but no children, spouse, or siblings, then parents inherit; and If siblings survive, but no children, spouse or parents, then siblings inherit. The rules become more complicated when you have blended families or a mix of surviving parents, children, and siblings. There are several ways to avoid this type of distribution, such as executing a will, transferring your assets into a trust, or jointly owning property. Avoid Disputes An estate plan is a proactive measure you can take to mitigate family discord during an already difficult situation. Specifying exactly how you want...

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| Read Time: 4 minutes | Business Law

How Much Does a Business Attorney Cost in Texas

As a business owner, you’ve no doubt run into situations where you needed legal help. Due to the way most attorneys handle billing, it’s nearly impossible to figure out: Just how much does a business attorney cost? As a result, budgeting for legal help can be a challenge. Law firms rarely disclose their prices outright, and many operate on the “billable hour” model that offers little clarity to businesses needing to carefully plan their expenses. Fortunately, more attorneys are moving to a “flat fee” model for billing, which offers much greater predictability to clients. Flat-Fee vs. Hourly Billing The traditional method of charging for legal services is based on the billable hour. Under this model, attorneys track the time they spend working for a client in six-minute increments. Attorneys and firms with billable hours typically require a retainer to cover the cost of the project. However, the initial retainer may be set at an amount that doesn’t necessarily reflect the true cost of the project. Flat-fee billing, on the other hand, involves estimating the cost of the project before any legal work takes place. With this method, the client has a clear idea of how much their lawyer will cost before making a commitment. How Do Attorneys Calculate Flat Fees? Attorneys calculate flat fees using their past experience with particular legal issues. In general, attorneys will take into account: The type of legal services requested; How long they estimate the project to take; How difficult the project is; and Potential issues that could extend the duration of the project. Once the attorney estimates the approximate time, they will calculate a flat fee based on their hourly rate. How long something will take largely depends on the complexity of the legal matter at hand. For example, experienced Texas business attorneys may find it easy to estimate the cost of their business formation services because the process is relatively straightforward. However, if the legal matter involves a complicated contract issue, it may be more difficult to estimate. Is a Flat-Fee Billing Better Than Hourly? Flat fees aren’t necessarily cheaper than hourly rates, but they do offer a number of benefits to clients. When you buy other professional services, you often have the option of paying “per project” rather than by the hour. By bringing that concept to the legal profession, flat-fee billing gives clients the ability to make well-informed decisions about hiring an attorney. In other words, flat-fee billing significantly increases a client’s ability to properly weigh the cost of obtaining particular legal help. In some cases, an attorney’s services would be beneficial, but not strictly necessary. For a small business on a tight budget, flat-fee billing allows them to decide quickly whether to forego these types of legal services. In other situations, an attorney’s services may be all but required. When that’s the case, flat-fee billing allows clients to budget more effectively for that expense. Flat-fee billing also gives clients more confidence about how much their attorney is charging. Texas attorneys are bound by strict ethical rules when it comes to the fees they charge their clients. Unfortunately, not all attorneys act ethically, and some clients worry that their attorney will “inflate” their billable hours. Because a flat fee is set and agreed upon from the get-go, clients worry less.  All this isn’t to say that hourly billing is worse. Many attorneys and firms with hourly billing can still estimate the cost of a project, even if they don’t offer flat fee billing as a payment option. How Much Does a Business Attorney Cost? The actual cost will vary greatly depending on the attorney and the project you hire them for. Different attorneys charge different amounts depending on their experience and the difficulty of the project. For example, new or less experienced attorneys tend to charge rates on the lower end of the scale. Ultimately, the cost depends heavily on the specific attorney and the nature of the legal services required. Only your attorney will be able to tell you how much their legal help will cost. Accordingly, it’s best to speak with the attorney directly about your legal issue. Most attorneys offer free initial consultations where you can learn more about the total cost of their legal services. Do I Need a Business Attorney? Because of how much attorneys can cost, business owners are often hesitant to hire them unless they feel like it is truly necessary. While there are some things a business can do without an attorney’s help, in most cases it’s best to hire an attorney. Even something that seems simple (like obtaining a business license) may involve unexpected obstacles. In other cases, having an attorney will be necessary, such as during contract negotiations or if there’s an employment dispute within your company. The bottom line is that having an attorney you can go to for business law matters is beneficial in the long run. Particularly if you hire an attorney early in your business’s lifecycle, they’ll be able to provide better legal assistance because they’ll be more familiar with the needs and goals of your business as it grows. We Offer No-Nonsense Flat-Fee Pricing Massingill Attorneys & Counselors at Law understands that transparent pricing practices are valuable to our clients. That’s why we offer flat-fee rates for our legal services. Whether you’re just starting a business or need assistance with your existing business, our business law attorneys are here to help. Book a consultation today or give us a call at 512-410-0343 to get started.

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| Read Time: 5 minutes | Business Law

Small Business Lawyers: How They Can Help You

Running your own business can be rewarding work. For many, it’s a dream come true.  But if you currently own a business, or even if you are in the early stages of starting your own business, you know just how much there is to do and how complicated it can be.  Regardless of where you are in the business ownership process, you may have at some point considered whether you should hire an attorney. But you might be asking yourself, What does a small business lawyer do?  Many people wonder whether an attorney can actually provide value to their business. In reality, an experienced small business lawyer can help your business in countless ways.  The business lawyers at Massingill Attorneys & Counselors at Law can provide invaluable services to your Texas small business. From legal research and advice to in-court business litigation disputes, we have what it takes to be your Texas small business law firm. Contact us today for a free consultation to discuss your business needs and see how our attorneys can help you.  What Does a Small Business Lawyer Do?  Lawyers help clients understand the law and navigate legal disputes. But what does a small business lawyer do, specifically?  A well-qualified small business lawyer will be able to provide a wide array of legal services. Below are some of the services we frequently provide to our Texas small business clients.  Business Formation Before starting a business, there are a number of key decisions you must make and legal requirements you must comply with.  Do you want to set your business up as an LLC, a partnership, a corporation, or some other type of entity? How do you go about registering your business with the Texas Secretary of State?  An experienced small business attorney can help you navigate these crucial questions and many more as you formally set up your business. At Massingill Attorneys & Counselors at Law, we can assist you with all aspects of the business formation process. Our Texas business formation attorneys can help:  Determine the right entity type for your small business; Advise on tax implications and personal liability protections; Draft and file any necessary corporate formation documents; Apply for an employer identification number (EIN) from the IRS; and Provide valuable advice and counsel moving forward.  Setting up your Texas small business correctly is crucial to its future success. The wrong decisions at the outset can lead to problems down the road that may be costly and time-consuming to correct. Thus, make sure to have someone in your corner with the knowledge and legal expertise to put your business in the best position possible. Business Transactions Sometimes, you might need an attorney to help your business with transactional matters.  If your business is preparing for a corporate merger or acquisition, it is almost always recommended to engage an experienced legal professional to advise you throughout the process.  Our attorneys regularly assist our small business clients with negotiating business transactions and drafting necessary documents to get deals to close. We will also work in consultation with your CPA to ensure that we do what is in the best interest of your business.  Contract Drafting and Review No matter what type of business you own, you will almost certainly require contracts at some point or another.  Examples of commonly used business contracts include:  Partnership agreements,  Operating agreements,  Indemnity agreements,  Nondisclosure agreements,  Property and equipment leases,  Purchase orders,  Security agreements,  Employment contracts,  Independent contractor agreements, and  Noncompete agreements.  Contracts are legal documents. Thus, it is imperative that you have an attorney who can draft and/or review any documents that may be critical to the success of your business and ensure that they are valid and enforceable. At Massingill Attorneys & Counselors at Law, we recognize that each business is unique and will have different needs. That’s why we will work with you to review and draft contracts that are tailored to fit your business.  Intellectual Property As your business grows, you may discover it is time to hire a small business attorney to help protect and pursue your intellectual property rights.  Many people think that intellectual property is reserved exclusively for rights in inventions. Thus, they mistakenly believe that if they are not an inventor, they do not need an IP attorney. However, this is not the case.  While patent rights are of course one important category of intellectual property rights, trademarks and copyrights are two other important intellectual property rights that are applicable to many small businesses.  An experienced small business lawyer can help you register trademarks and copyrights you may use in connection with your business. Doing so can help you build and grow your overall brand.  Additionally, by registering your trademarks and/or copyrights, you put the general public on notice of your intellectual property. If someone attempts to infringe on your validly registered IP, a small business attorney can help you take legal action to enforce and safeguard your rights moving forward.  Business Disputes and Litigation No matter how smoothly your business runs, there is always a possibility that a dispute will arise.  Small business disputes come in many forms. Examples of common legal disputes that might arise in the course of your business include:  Partnership disputes,  Breach of contract disputes,  Customer disputes,  Employment disputes, and Disputes with other businesses.  No matter what type of legal dispute your business is facing, it’s no secret that it can cost you both time and money to resolve. However, hiring a small business lawyer can often lead to a more efficient and cost-effective resolution.  If and when a dispute does arise, don’t be left wondering where to turn. The attorneys at Massingill Attorneys & Counselors at Law are trained negotiators ready to fight for your rights. We will work to effectively and efficiently resolve your dispute. Why Hire Massingill Attorneys & Counselors at Law as Your Small Business Lawyers So, what does a small business lawyer do? A well-qualified small business attorney will be able to assist you with just about anything that...

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| Read Time: 4 minutes | Estate Planning

When to Start Your Estate Planning (in Texas)

If you have lost a loved one before, you know just how difficult it can be to manage their estate and affairs in the aftermath of their passing. Matters can become even more complicated if your loved one did not leave behind a comprehensive estate plan.  Everyone will die some day—this is just an unavoidable fact of life. And while you may not necessarily want to think about this, it is important to do so sooner rather than later. But exactly when should you start estate planning for yourself?  The short answer is that it is never too early to get started on creating your estate plan. At Massingill Attorneys & Counselors at Law, we know just how important it is to have a comprehensive estate plan in place that is created with your particular needs in mind. If you have questions about when to start your estate planning and how to get started when you are ready, give our estate planning attorneys a call today. Common Estate Planning Questions Before getting into when you should start your estate planning, it is important to have a general understanding of what an estate plan is and when yours will come into play.  Most people have heard of the term “estate planning” at some point or another. But if you don’t know exactly what that means in a practical sense, don’t worry—you are not alone. In fact, there are many misconceptions about what constitutes an estate plan and when you might need one. Below are some commonly asked estate planning questions to help guide you through the beginning stages of creating your own estate plan.  What Documents Are Typically Included in an Estate Plan? Many people believe that creating an estate plan is synonymous with creating a will. However, this is not necessarily the case. A last will and testament is certainly an important estate planning document. However, a comprehensive estate plan will contain additional documents as well.  Below are some examples of documents that you might want to consider including in your estate plan:  Last will and testament,  Revocable living trust, Pour-over will,  Financial power of attorney, Medical power of attorney, Directive to physicians, HIPAA waiver,  Final disposition instructions, and  Guardianship nominations for minor children (if applicable).  A comprehensive estate plan will go over more than just who you wish to leave your assets to after your passing. Contact our Texas estate planning attorneys today to discuss what estate planning documents are right for your unique circumstances. Why Do I Need an Estate Plan?  Of course, one of the primary reasons people create an estate plan is to better ensure that their property and assets end up where they belong. But there is more to estate planning than just distribution of assets after your passing.  Who will manage my finances if I become incapacitated but am still alive? How do I let my loved ones know my end-of-life decisions? Who do I designate to make medical decisions on my behalf in the event I am unable to make such decisions for myself?  These are questions that will often be addressed in a comprehensive estate plan.  So, why do you need an estate plan? There are a number of valuable reasons:  Clearly delineate your intentions regarding the distribution of your assets after your passing;  Sleep easier knowing that you have organized your affairs for the future;  Better protect the people you love;  Avoid potential legal disputes that may otherwise arise without an estate plan in place; and  Give your family peace of mind.  When someone passes away, it is always most difficult on their loved ones. And when someone dies without an estate plan in place, this nearly always results in a more complicated, time-consuming, and emotionally draining process for their loved ones.  No person knows your wishes better than you do. Thus, protect your legacy and your loved ones by making sure you have all the necessary documents in place for your estate plan. Do I Need to Hire an Attorney to Create My Estate Plan?  Of course, there is no legal requirement in Texas stating that you must have your estate planning documents drafted by an attorney. In fact, Texas law specifically permits what are called “holographic,” or handwritten, wills.  Nevertheless, wills and other estate planning documents are legal documents. Thus, there are many additional laws and best practices surrounding their drafting and execution. In an effort to ensure that all your documents are legally binding and enforceable, it is best to have an estate planning professional draft your documents and guide you through the process. Many people mistakenly believe that they cannot afford to hire an attorney to draft their estate planning documents. In reality, you cannot afford not to.  At Massingill Attorneys & Counselors at Law, we want to make estate planning documents as accessible as possible. That’s why we offer affordable pricing and flat fees for both will-based and trust-based estate planning packages.  So When Should You Start Estate Planning?  Don’t wait—get started on your estate planning today.  This life is precious. And as cliché as it may sound, it is also uncertain and can change in an instant. Thus, it is never too early to start getting your affairs in order.  People frequently believe that estate planning is reserved for the elderly, but this is not the case at all. All adults should have an estate plan in place, no matter their age or stage of life.  So if you are wondering whether it’s time to start estate planning, the answer is yes! It is best to do so as soon as possible just to be safe. Your Austin, TX Estate Planning Attorneys If you are searching for a Texas estate planning firm who will provide you with unparalleled services and attention, look no further than Massingill Attorneys & Counselors at Law.  Legal documents are complex, but we make it simple. Based in Austin, TX, our firm has helped countless clients achieve the peace of mind that comes with creating a comprehensive estate plan.  Your family is unique—your estate planning...

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| Read Time: 7 minutes | Healthcare Business Law

How to Sell a Medical Practice in 2021 [Step by Step]

This comprehensive guide explains how to Sell a Medical Practice in 2021. We will review the most important things to consider before you move forward with your decision. A physician may sell their medical practice for a variety of reasons. For some, a well-deserved retirement is on the horizon, while others may be seeking a better opportunity elsewhere. A sudden illness or relocation are also motives to sell. Our guide is intended to help physicians navigate this complex process. Related Article: How to Buy a Medical Practice in 2021 [What You Should Know] Build Your Team Selling a medical practice involves many legal, financial, and practical considerations. To navigate through these issues, you should recruit a team of professionals to assist you. Having experts to guide and advise you through the process will maximize the value of your practice.  The key is to build your team early in the process. While it may be tempting to jumpstart the sale process by guesstimating your practice’s value and seeking potential buyers, you could get stuck in an unfavorable situation. What may start as an informal negotiation could end up as a legally binding obligation. At a minimum, your team should consist of an attorney, accountant, and valuation expert.  Healthcare Business Law Attorney A competent healthcare attorney, experienced in the purchase and sale of medical practices, is invaluable. An attorney can assist you with the following: Compliance with state and federal healthcare laws, Due diligence, Employee and staff relations, Management of patient records,  Open contracts with third parties, and All legal documents related to the sale. Your attorney will help negotiate the terms of the sale and ensure that you do not have any unexpected obligations after it is complete. Certified Public Accountant (CPA) A CPA is integral to determining the accurate value of a medical practice. Having a CPA to create financial statements will provide a clear picture of the business’s financial status. Your CPA will also explain the tax implications of the transaction, which will help determine the type of agreement you enter into and how to structure the sale. Valuation Expert  Your medical practice’s value is the core of the entire transaction. The value affects the list price, attracts buyers, and sets the standard for the final purchase price. A health care valuation expert will perform extensive research and analysis on your medical practice to determine its fair market value, considering both tangible and intangible assets.  Valuing Your Medical Practice The valuation of the medical practice is what drives most of the negotiations toward a final purchase price. The fair market value (FMV) is the standard for valuing a practice. FMV is defined as the result of an arms-length transaction between an informed, willing buyer and an informed, willing seller. To value a medical practice, an appraiser will consider many factors, including: The nature and history of the business, Book value and financial condition, Economic outlook, Earning capacity, Fixed assets such as equipment and real estate, Goodwill and other intangible assets, Post-transaction compensation, and  Market comparables.  It is important to note that the FMV of the medical practice is not the same as the purchase price. Rather, the FMV is the basis upon which the parties determine the purchase price.  Find Multiple Buyers Having multiple offers could increase the value of your practice. The best way to locate potential buyers is to contact prospects, such as hospitals, colleagues, and competitors, and let them know you are considering selling your practice. Pre-Purchase Steps Many preliminary steps lead up to the final purchase of the medical practice. Preliminary Agreements To provide security for yourself, there are several preliminary agreements you should consider before investing time and money into the potential sale.  Letter of intent  Once you have a prospective buyer, consider executing a non-binding letter of intent. The parties can preliminarily resolve issues within the letter and outline the tasks to complete before entering into a purchase agreement. The letter of intent serves as a roadmap for the transaction.  Confidentiality and non-solicitation agreement As part of the due diligence process, the buyer will have access to confidential information of the practice, such as financial statements and employee and patient lists. To protect this information, you may want the buyer to sign a confidentiality and non-solicitation agreement. The terms of the agreement would prohibit the buyer from disclosing the information for purposes other than performing due diligence. The agreement would also bar any solicitation of employees and patients of the practice until after the sale. Structure of the Sale  You and the buyer must agree on whether the medical practice’s sale will be a stock purchase or asset purchase. A stock purchase is when the buyer purchases the entire business, taking complete ownership and acquiring all assets and liabilities. In an asset purchase, the seller remains the practice’s legal owner and the buyer purchases only specific assets, such as equipment, licenses, inventory, and goodwill. There are significant legal and tax implications to either type of sale. Your CPA and attorney can guide you on this and advise on which option best suits your needs. Due Diligence Both the buyer and seller will go through their own due diligence process. The buyer’s due diligence will involve learning the ins and outs of the medical practice to ensure that the business is accurately portrayed. To accomplish this, the buyer will do the following:  Examine financial records, including tax returns and financial statements; Review all assets and liabilities;  Ensure compliance with applicable healthcare laws and regulations; Understand the billing and coding process of the practice; Assess all current working relationships; Review all open contracts, such as supply contracts and lease agreements; and  Analyze any ongoing litigation matters. The seller’s due diligence is not quite as lengthy as the buyer’s but just as important to the transaction’s success. Ensure compliance with the corporate practice of medicine The corporate practice of medicine (CPOM) is a legal doctrine that limits who can practice medicine and provide medical services. For example,...

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| Read Time: 6 minutes | Healthcare Business Law

How to Buy a Medical Practice in 2021 [Step by Step]

This is a step-by-step guide on How to Buy a Medical Practice in 2021. Purchasing a practice is an incredible undertaking and a complex process. In this guide, you will learn how to acquire a medical practice and better understand the factors you should consider before making a final buying decision. Whether you want to expand your current practice or go completely solo, there are many practical, legal, and financial considerations. Our guide is intended to help you navigate this purchasing process. Related Article: How to Sell a Medical Practice in 2021 [Step by Step] Decide What You Are Looking For When considering a practice to purchase, you need to determine whether it fits your lifestyle and personality, not just your medical expertise. Here are some important considerations: Culture—do you see yourself working in that kind of atmosphere? Location—are you happy with the location of the practice, from the neighborhood to the actual building itself? Management style—are the services, policies, practices, and procedures within your skillset and something you are comfortable with? Staff—will the staff remain with the practice, or will you have to hire new employees? Patients—are the current patients the demographic you are comfortable providing medical care to long term? You also need to know whether you want a stock purchase or asset purchase. In a stock purchase, the buyer takes full ownership of the entire practice, including all assets and liabilities. In an asset purchase, the buyer purchases only certain assets, such as customer accounts, medical equipment, and services contracts. There are significant legal and tax consequences to both options. An experienced healthcare attorney can walk you through both purchase types and make recommendations based on your goals.  Corporate Practice of Medicine There are limitations on who can practice medicine and provide medical services. The Corporate Practice of Medicine (CPOM) is a legal doctrine that protects patients from the commercialization of medicine. Creators of the CPOM feared that health care providers would make decisions based on increasing profits as opposed to providing quality care. Under Texas’s CPOM doctrine, unless they meet an exception, corporations and business entities cannot practice medicine in the state. Additionally, corporations and non-physicians cannot employ a physician to provide health care services in Texas.  The CPOM is applicable when choosing how to structure the purchase of a medical practice. If the transaction is an asset purchase, you need to select an entity type that will be buying the assets. This entity must comply with the CPOM. Letter of Intent Once you choose a medical practice to purchase, you may consider agreeing to a non-binding letter of intent. The letter memorializes certain expectations and obligations of the parties. It is also a way to preliminarily resolve issues before going further into the purchase process. A comprehensive letter of intent sets the groundwork for the purchase agreement. Valuation The practice’s valuation is at the center of most negotiations in the purchase of a medical practice. Appraisers use the fair market value standard, which is the price that results from a bargained-for exchange between a willing, informed buyer and a willing, informed seller.  It is best to hire your own valuation expert to confirm the seller’s value of the practice. Do not blindly agree to the seller’s valuation. The seller’s broker may inflate the valuation because most brokers are commission-based, so they have an incentive to increase the value. Additionally, medical practice owners often include their sweat equity in the valuation. When you work with an appraiser, as a neutral party, he or she can provide a more accurate valuation.  Due Diligence Due diligence is an investigation of the facts and details of a company. The buyer’s due diligence process is more extensive than the seller’s. For the purchase of a medical practice, the buyer’s due diligence typically requires a review of the following: Financial statements, Assets, Books and records, Tax returns, Accounts receivable, Personnel files, Employee agreements, Patient charts, Insurance policies, and List of creditors. The buyer will also want to perform a physical inspection of the premises where the medical practice is located. The building and premises should be in compliance with all applicable building and zoning ordinances, For any third-party leases or contracts belonging to the medical practice, the buyer should know which contracts are assignable. Some contracts are essential to the operation of the practice, so the buyer will want to include those as part of the purchase. Examples include equipment and services contracts, real estate leases, software licenses, and marketing and advertising agreements. The most important contract is the real estate lease. Do not make assumptions about the property on which the practice is located. It is best to negotiate a new lease with the landlord, which may be as simple as the seller assigning his interest to the buyer.  Another part of the due diligence process is conducting a search on the medical practice as an entity and the principal owners to learn of any liens or lawsuits. This information will help you spot potential risks and give you tools to negotiate a fair purchase price and sale terms.  Lastly, the buyer should ensure that the practice is in compliance with all applicable state and federal healthcare laws and regulations. An experienced healthcare business attorney will be invaluable at this stage based on the volume of information to be evaluated. The Purchase and Sale Agreement Once all due diligence is complete, the parties will negotiate the terms of a purchase and sale agreement to finalize the transaction. This document encompasses all due diligence findings, negotiations between the parties, and legal responsibilities and obligations.  Basic Terms  As with any contract, the purchase and sale agreement will have basic provisions regarding the sale, like what is being sold, the type of sale, and the sale terms. Some of these terms might include Consideration,  Purchase price,  Time limits on financing,  Important dates, and  Consequences of failure to secure financing. The parties must fairly negotiate the purchase and ensure it is in compliance with federal laws and regulations. For example,...

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| Read Time: 4 minutes | Business Law

Partnership Agreements in Texas: Why Using a DIY Template Is a Mistake

There are dozens of websites that offer legal document templates for low or no cost. The cost of a lawyer may tempt business owners to use these templates rather than hire legal counsel, especially when it comes to forming a simple business entity like a partnership. Unfortunately, however, using a legal DIY template can pose several problems. Because Texas partnership agreements are important documents, business owners should treat them with care. Finding and using a template online comes with a number of risks that could make doing so a costly mistake. For assistance, please don’t hesitate to contact us online or call our firm at (512) 410-0343. Our Texas business lawyers will explain what you need to know about partnership agreements in Texas. Types of Texas Partnerships A partnership is one of the most basic types of business organizations. All you need to form one is two or more people engaged in a for-profit business. Legally speaking, a Texas partnership agreement is not strictly required. However, having this governing document is the best way to avoid internal issues as the business grows. There are several types of partnership, and each will require a slightly different partnership agreement. Texas partnerships can be: General partnerships (GP), Limited partnerships (LP), Limited liability partnerships (LLP), and Limited liability limited partnerships (LLLP). Each type of partnership has different advantages. Generally speaking, which type of partnership you form depends on the role that each partner has in the business. Massingill Attorneys & Counselors at Law can help you decide which type of partnership suits your business the most. Problems with Using a Partnership Agreement Texas Template As mentioned above, using a partnership agreement template is not without risk. If you’re considering using a template for your Texas partnership agreement, here are the issues you may run into and the reasons why we strongly suggest against them. Partnership Agreements Are Not “One Size Fits All” From one business to another, there are certain things that remain relatively similar. However, the governing documents for those businesses may be very different. This causes a problem when you consider that most DIY templates are designed to cover as many situations as possible. As a result, using a template partnership agreement likely means that you miss out on some of the fine tuning you may need. For example, a “partnership agreement” template may have some parts that apply to both a general and limited partnership; but at the same time, that single agreement will not work particularly well as either a Texas limited partnership agreement or general partnership agreement. Texas business owners should therefore be wary of how broad the templates are. You Won’t Know What’s Missing If you’re using a DIY template, then you probably don’t have much experience with these agreements to begin with. If that’s the case, then it is important to recognize that even if you understand what is in the template, you may know what is not in it. In other words, there could be crucial provisions missing that you are unaware of. This is one area where the benefit of an attorney cannot be overstated. By having an attorney draft your partnership agreement, you can rest assured that the agreement contains every part that it should. You Don’t Know Who Drafted the Template Even on websites that appear reputable, there is no guarantee that a lawyer or legal professional drafted the template. In fact, in many cases it is just as likely that someone drafted the partnership agreement Texas template while referencing another online template. When that happens, misinformation or poor drafting can propagate from one template to the next if various sites all use each other as a source. Unfortunately, there’s simply no way to know for sure. You Won’t Receive the Personalized Advice or Drafting a Lawyer Provides When it comes to drafting a limited partnership agreement, Texas business attorneys do more than just write out the document for you. Remember that one of the reasons a lawyer is expensive is the knowledge and training they have. Drafting any kind of business document, whether it’s a contract or a partnership agreement, is a complex process. Consequently, attorneys receive training to spot relevant issues and understand the complexity of a given legal situation. If your partnership is unique in some way or if you have specific ideas about the direction of the business, a lawyer is available to discuss those ideas with you in real time. An attorney can provide you with a custom agreement tailored specifically to your needs. While you may save some money, you won’t have access to any of that added value by using a template. You Might End Up Needing a Lawyer Anyway There are two reasons why a business owner might end up hiring a lawyer after using a template. First, businesses frequently need legal help with a variety of issues unrelated to their formation. For example, a partnership may need help negotiating a contract with another business. If you’ve already hired a lawyer to help you draft your Texas partnership agreement, then it will be that much easier if you need other legal help later on. As an added bonus, a lawyer who has been with you from the start will be more familiar with you, your business, and your goals. This can allow them to provide more efficient and effective service. More significantly, you may end up hiring a lawyer because of issues with the partnership agreement template you used. If the agreement is drafted improperly, you may run into conflicts with your business partner down the line. Depending on what the problem is, you may end up paying more than if you simply hired an experienced Texas business lawyer in the first place. Templates Are Less Flexible Than You Think Partnership agreement templates look like a good option because of how easy they seem to be. After all, what is simpler than filling in the blanks? Unfortunately, if there are larger changes you want to...

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| Read Time: 4 minutes | Business Law

Employment Contracts in Texas: Mistakes for Small Business Owners to Avoid

Contracts exist to help businesses and individuals set expectations for their professional relationship. Texas employment contracts are no different and are an important part of any small business. When drafting an employment contract, Texas businesses must be careful. Not everything that a business owner may want to include is enforceable. Therefore, having a basic understanding of Texas employment contract law is crucial, especially if drafting an employment agreement yourself. Texas Employment Agreements: Overview Texas, like most states in the U.S., is an “at-will” employment state. With at-will employment, the employee or employer may terminate the business relationship without notice at any time. They may do so for no reason or any reason not prohibited by law (for example, it would be illegal to fire someone for a discriminatory reason). When there is an employment agreement, however, the parties will instead be bound by the terms they agree to. Many businesses use some sort of employment agreement when hiring a new employee. Doing so ultimately protects both parties by clearly setting the ground rules for the employment. With that in mind, here are some common pitfalls small business owners may make in their contracts and how to avoid them. Overly Broad Non-Competition Clauses This is perhaps the most significant mistake employers make with respect to their employment agreements. Particularly in competitive industries, business owners often want to restrict their employees’ ability to work for competitors. However, Texas law places limitations on these provisions. Specifically, a agreement not to compete must be reasonable with respect to The time it remains in effect after the termination of employment; The geographic area (like a state or a county) to which the non-compete applies; and The scope of the activity covered by the non-compete. If a contract fails to be reasonable in any of these ways, a court may find it unenforceable. This may be a problem for businesses that use the same non-competition clause or agreement for all their employees. For example, a non-compete probably could not restrict a low-level sales rep the same way it could a co-owner or high-level executive. Accordingly, small businesses are better off providing a fair and balanced non-compete that a court will uphold. Business attorneys familiar with Texas employment contract law can help you draft an appropriate non-compete to protect your business. Non-Compete vs. Non-Solicitation Non-compete clauses often include a “non-solicitation clause.” While non-competes cover an employee’s competition with the business, non-solicitation clauses protect a business’s existing clients and employees. While not always strictly necessary, non-solicitation agreements are useful in industries where a former employee may try to “poach” clients or coworkers from their former employer. Ambiguous Conditions for Termination Clarifying the events or conduct for which the business may fire someone is a significant part of a well-drafted contract. Not only does it make clear to the employee what kind of conduct they should avoid, it can protect your business if an employee challenges their termination. Texas businesses have many options when it comes to termination clauses and what they include. If you’re unsure how to draft an employment termination clause, our Texas business law attorneys can help. Unclear Descriptions of Duties A common mistake business owners make is not including a sufficient job description in their Texas employment contract. While it may seem unnecessary if both you and your future employee understand what will be expected of them, clearly defining their duties can avoid headaches later on. In addition, being absolutely clear about the scope of an employee’s job can protect the business from liability later on. Under the doctrine of “respondeat superior,” courts may find an employer liable for the acts of their employees working within the scope of their employment. Whether respondeat superior applies depends on the specific facts of a given case; however, a clear job description in the employment agreement may make that determination easier if necessary. Missing or Incomplete Confidentiality Clauses When it comes to an employment agreement, Texas business owners may not always think to include a confidentiality clause. While not all businesses will need one, business owners should consider it if the employee will handle any sort of sensitive information. Texas employment agreements with a confidentiality clause should be sure to address confidentiality both during and after employment. Employees may be clear on the expectation of confidentiality while employed but may not understand their responsibility when they leave. Texas employment agreements should therefore include information about how long the confidentiality will last after an employee leaves. If you’re concerned about your employees handling sensitive information, we can help you draft a strong confidentiality agreement. Minimal Compensation and Benefits Information In the context of an employment contract, Texas businesses have the upper hand when it comes to bargaining power. As a result, employers can take advantage of opportunities to make new employees more comfortable with their position within the company. One such opportunity is clearly defining any offered compensation and benefits in the employment agreement. Doing so allows the business to explicitly establish the base salary or wage, insurance options, and how the business handles holidays and vacation time. As an added bonus, this may also allow a business to protect itself from challenges by an employee about what the company offers. Unclear Drug Testing Policies Not all employers require drug testing. But when they do, making that clear is important. Because Texas has a medical marijuana program, employees may be under the impression that their use of medical marijuana is shielded from any employer drug test. However, this is not necessarily the case. Explaining drug testing policies in the employment agreement can help businesses avoid training an employee who may take issue with those policies. Ready to Draft Your Texas Employment Contract? At Massingill Attorneys and Counselors at Law, we believe in making sure our clients understand the legal answers to their questions, no matter how complex. If you’re ready to take your business to the next level with a robust employment agreement, we can help. Contact us today...

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| Read Time: 4 minutes | Healthcare Business Law

Physician Employment Contracts and Your Healthcare Business

Over the years, doctors signing physician employment contracts with small practices has become increasingly commonplace. Retaining an employment law attorney’s services to identify the obligations and expectations of either party to physician employment agreements can minimize future disputes.  What Is a Physician Employment Contract? A typical physician contract agreement dictates the relationship between a physician and their employer. These employment contracts provide provisions outlining the terms of employment, such as compensation, job requirements, benefits, termination, non-compete clauses, and professional liability insurance. The terms of all physician employment contracts are negotiable and ensure the final agreement is fair to both parties.   Important Terms in a Physician Employment Contract There are several typical provisions you should consider when drafting a physician employment contract. Duration Physician employment contracts can specify the length of time the physician will provide services for your business. Additional terms may address other considerations relating to the duration of a physician employment contract, such as  whether the term can be automatically renewed or what notice is required for cancellation. Services Ensure that the contract includes a detailed description of the expectations of the physician. This may include details such as The type of medicine the physician will practice, The number of hours the physician must work each day or week, and The physician’s on-call obligations.  It may also address whether you will expect the physician to undertake outpatient care or administrative duties. Compensation What will be the compensation for the physician you hire? Compensation elements in physician employment contracts may cover a few areas. Base compensation  Base compensation is a guaranteed salary. However, base compensation is a negotiable element of physician contracts. Negotiations regarding base compensation must always consider state and federal compliance, industry pay standards, and inflation if the contract reflects multiple employment years.   Productivity incentives Productivity incentives base compensation on productivity. These types of incentive clauses in physician contracts must include a clearly defined productivity formula for calculating payment. Productivity measurements must consider the equitable scheduling of patients and not negatively impact the quality of patient care. Benefits You may include benefits in your physician contract, such as: Retirement,  Health insurance,  Disability,  Reimbursement for travel or continuing medical education,  Paid time off,  Vacation, and  Sick pay.  Depending on the physician you plan to hire, you may wish to include these types of benefits in your physician employment contract. Other benefits Other types of bonuses might include student loan reimbursement, reimbursement for relocation expenses, severance pay, and many others. These types of benefits may incentivize employment with your business.  Buy-in clause Buy-in clauses provide physicians the opportunity to buy into your business. Determining whether or not to include this type of clause in your physician employment contract requires careful consideration of employees’ buy-in parameters and requirements.  Physician employment contracts may vary; however, clearly defining compensation details assures clarity between you and your employee.  Termination Rights Every contract should include a termination clause outlining the terms and conditions of terminating employment. For example, early termination may be permitted “for cause” or “without cause.” Circumstances prompting early termination may include: Revocation of medical license,  Malpractice,  Drug use,  Violations of the physician contract, and  A felony conviction.  Additionally, without-cause provisions may provide that either party may terminate the agreement if sufficient notice—for example, 60 days—is provided.  Professional Liability Insurance Typically, the employer will insure the physician employee with professional liability insurance. Professional liability insurance considerations to address in the employment contract might include the following: Type of insurance, The amount of coverage, and Whether coverage continues after the physician leaves employment.  Since both the employee and the physician are liable to a patient, carefully review professional liability insurance obligations.  Non-Compete Clause A non-compete clause in a physician employment contract limits an employee’s ability to work elsewhere after employment termination. Special conditions exist for valid non-compete clauses in employment contracts, including the following:  They must be limited to a reasonable geographic area;  The scope of the restrictions must be reasonable; and Their applicability must be limited to a reasonable time frame.  An experienced business law attorney provides industry-specific guidance on non-compete clauses in physician employment contracts.  Dispute Resolution While disputes between parties to a contact may resolve in court proceedings, you may consider including an arbitration clause in your employment agreement. Arbitration is generally a less expensive and more efficient resolution to disagreements than litigation. An attorney can help you determine whether an arbitration clause is appropriate for your physician employment agreements.  Why Should Employers Have Their Contracts Reviewed?  Retaining a skilled business attorney’s services to review your physician employment contract protects you and your business. Failure to properly identify responsibilities and obligations in a physician employment agreement can result in disagreements and, potentially, litigation.  It’s important to critically analyze compliance with federal and state laws to prevent exposure to potential violations. Also, an attorney may provide insight as to the following areas:  Fair market value compensation,  Creating and reviewing compensation plans, Non-compete clauses, and Dispute resolution and litigation.  The attorneys at Massingill Attorneys and Counselors at Law ensure you create a comprehensive physician employment contract protecting your business interests and interests. Employers need to address these and multiple other issues regarding physician employment contracts before offering an employment contract.  Why Massingill Attorneys and Counselors at Law?  The attorneys at Massingill Attorneys and Counselors at Law possess extensive experience in business and healthcare law across Texas. We understand the expense and stress resulting from a weak contract. That’s why we draft rock-solid agreements for our clients, protecting you and your business from future litigation. Additionally, we revise existing contracts and review new contracts to remedy gaps in potential liability.  Massingill Attorneys and Counselors at Law provides superior legal services to clients for reasonable fees. We understand how important your business is to you. Contact us today to discuss questions regarding your physician employment contract.

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