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Is a former employee stealing your clients and staff?
When a customer comes into a business and steals an item from the shelves, the business suffers a loss. A prudent business owner will take steps to prevent such theft and even to pursue restitution from someone who commits the offense. However, in some Texas businesses, there is a type of theft that may have an even more devastating effect on the business.
An ex-employee who steals clients and other employees can quickly send your business into a tailspin. You may find your production grinding to a halt while you try to fill vacancies on your staff, and your profits may plummet as your customers jump ship. Like the prudent store owner, there are steps you can take to prevent this type of theft and options for seeking justice.
How can a non-solicitation agreement protect you?
One of the most important contracts you may have as a business owner is your employment contract. Not only does this contract outline the expectations between you and your employee while the employee is associated with your company, but it can also include restrictions on what your employee can do after leaving the job. A common restriction in an employment contract is a non-solicitation agreement, which can offer you the following protections:
Protect your business in breach of contract matters
Contracts are useful way to protect the interests of your company. Unfortunately, however, other parties may deviate from the terms of the agreement or refuse to follow the terms of the contact. A breach of contract is more than just an inconvenience – it is a threat to the well-being of your Texas business.
It is in the interests of all business owners to understand how to proceed when contract matters do not go as planned. You have the right to take action, enforce the terms of the contract and seek a beneficial resolution to the matter. There are various remedies that may be available to you, including securing damages.
The next steps for your company
Businesses of all types use contracts for anything from sales to employee agreements. In the event you find your company involved in a dispute over a contract, it is prudent to seek a satisfactory conclusion in a timely manner. It may be possible to reach an out-of-court agreement, but often, it is necessary to take legal action to recover losses from any financial damage that occurred and compel the other party to fulfill the terms of the agreement.
Are you ready to create a buy-sell agreement?
Owning a business means understanding that you will not always be around to run the company. The time may come when you choose to retire, or you may suffer from a disabling event in the future or pass away, any of which will make it impossible for you to continue owning and operating the company.
Because such possibilities exist, having a buy-sell agreement in place could greatly benefit your business. This document would allow you to have arrangements in place for the continuation of the business in the event of your retirement, disability, passing or other event that prevents you from moving forward with the company.
The buying parties
When it comes to buy-sell agreements, business owners typically utilize one of four types of arrangements. Those agreements include the following:
- Selling the company to the company itself
- Selling the company to an outside third party
Contracts for your employees could be good for your business
Texas business owners understand there are various challenges associated with owning and operating a small business. One of the unique issues you may have to address is how to deal with your employees. Regardless of the type of company you have, it can prove beneficial to draft employment contracts.
Employment contracts are a simple yet effective way you can protect your company and prevent many types of complications in the future. Written contracts provide both parties with significant benefits as they allow for everyone involved to know and understand their rights and obligations. If you do not have employment contracts or believe you should implement these in the future, it can be helpful to understand how to draft effective and enforceable agreements.
What should be in your contracts?
It is important when drafting employment contracts to be thorough, thoughtful and pursue terms that will be beneficial for you and protect the rights of those who work for you. Poorly drafted agreements or those that leave out important information could be invalid or unenforceable in the event that a former employee disputes it. Some of the things you may wish to include in your employment contracts include:
Working with vendors can help your company grow
Though you may have been the one with the great idea for a service or product, you likely understood from the beginning that your business venture could not move forward without the help of others. Even if you had the ability to carry on for a certain amount of time without seeking assistance from outside your inner circle, your success may mean you need to work with vendors, suppliers or manufacturers.
While you may feel a bit intimidated by working with outside companies, you may want to recognize this moment as the milestone that it is. This needed action likely means that your business has grown to a point that you cannot fulfill the necessary operational needs on your own, and that is a point about which to feel proud. Of course, you may still feel apprehensive about working with the right suppliers.
Aspects to consider
When looking for the right suppliers and manufacturers, you want to make sure that they appear reputable and also fit with the needs of your company. Some aspects to take into consideration include the following:
Protecting your business when you need to let an employee go
It's never easy to terminate an employee. Even if you have clear cause to do so, you may wonder about the potential ramifications of your actions. You may wonder if it will somehow affect your business, especially if the employee was subject to a non-compete or non-disclosure agreement. You may wonder whether he or she will file a wrongful termination claim against you, even though the law is on your side.
Truthfully, these are very real risks when you terminate an employee. However, you may be able to take steps to help ensure that your employee departs on the best terms possible. In some cases, you may have time to properly document a termination, but in others, that opportunity simply doesn't exist. How you address the situation could make all the difference.
When the termination needs to happen on the spot
In some cases, you will not have time to build a paper trail to protect your company. You may need to let some employees go immediately. More than likely, these types of terminations occur under circumstances such as the following:
Are you ready to dissolve your partnership?
Over the years, your company has grown and had its ups and downs. When your business first started out, you entered into a partnership because you and your partner felt that path was right for the goals and ambitions of the business. However, you may have come to the point, as many partners do, where you feel that the business relationship no longer works.
After much discussion, you and your partner may choose to dissolve the partnership. Of course, this type of relationship is not one from which you can simply walk away. Indeed, you must take the proper legal steps to ensure that the dissolution takes place in a manner that protects the soon-to-be former partners and the company.
One stays, one goes
The actions taken to dissolve partnership may depend on who wants to end the business relationship. If you want to continue with the company while your partner does not, you may need to buy out the other individual's shares in the company. On the other hand, if you want to leave the partnership, the other party may need to buy your shares. Having a buy-sell agreement in place can help ensure that everyone stays on the same page.
Should you change your company's business type?
When you first started your business, you undoubtedly gave much thought to the type of business entity you wanted to create. Because you were starting out small, you likely did not believe that you needed a business type that involved many complex aspects. After doing your research, you picked an entity that you believed best suited the needs of your company at the time.
Of course, now that your business has been up and running for some time, you may wonder whether your entity still suits those business needs. However, you may also wonder whether changing your business type is possible or necessary. To answer the first question, it is entirely possible to alter your type of entity. As for necessity, many reasons could lead to such a change.
Reasons to change
Depending on what is happening with your company — whether in terms of profit or growth — you may need to change your business entity for one or more of several reasons. Some of those reasons include:
5 questions to ask when creating a noncompete agreement
For various reasons, you may have decided that your company should utilize noncompete agreements when working to prevent your trade secrets or other important information from falling into the hands of your competitors. These agreements certainly have their uses, and if you believe that having such a contract could work toward protecting your company's best interests, it may prove wise to gain more information on these agreements.
In particular, you may want to focus on the enforceability of any contracts you create. Many business owners feel surprised to find out that their noncompete agreements do not meet enforceability requirements. As a result, they may not provide as much protection as hoped.
How to ensure enforceability
Fortunately, you can take steps to ensure that your noncompete agreement does not present issues that could later render it invalid. Some questions you may want to ask when drafting your contract include the following:
Are you ready to pass on the reins of your company?
Because you hold both your family and your business close, you certainly want to ensure that you take care of them. As a result, when you begin thinking about your retirement or possible demise, you will want to know that your family and company remain in good hands. Fortunately, business succession planning could prove useful in this respect.
When thinking about who you want to take over your business and how you want the company to continue to operate, you will likely have many aspects to consider. Wanting to keep the business within the family is understandable, especially if your children already work as part of the company. However, you still need to make sure your successor is the right fit for the job.
Willingness
In order for a succession plan to prove successful, a willingness to move onward and upwards needs to exist between both you and your successor candidate. If your candidate does not know whether remaining in the family business is what he or she wants to do long-term, it may be wise to consider another person rather than trying to force the company on an unwilling relative.
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508 N Ridgeway Dr., Cleburne, TX 76033|
817-645-1717
