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In this post we will be discussing the importance of carefully drafting an operating agreement for your brewery or distillery.

Once you’ve chosen the right entity for your brewery or distillery, you’ll need to draft some key contracts governing your business entity. Today, we will continue our Brewery Law 101 series by discussing operating agreements. As we discussed in our post on brewery entities, an LLC likely is the right choice of entity for your brewery or distillery. So we will focus on operating agreements, as operating agreements are the primary governing document for an LLC. (While we are specifically discussing operating agreements, many of these issues will carry over to the governing documents you will want for any entity type.)

One of the most appealing attributes of the limited liability company and why it has been so widely adopted is the…

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Brewery Law

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This post discusses business valuation, including the methods for valuing your business for a sale, merger, acquisition, divorce, or exit.

Entrepreneurs and business owners will generally need to value their business on many occasions during the course of a career. Whether part of a seed investment round, follow-on series investment round, merger or acquisition, partnership or owner dispute, or a partnership or ownership dissolution, you will likely need to fix a value to your business at least once.

Behavioral study indicates that people tend to value that which they are selling higher than they would value the same thing if they were buying. This means that most of the time, and especially when the valuation is forced, the number the buyer proposes and the number the seller will accept are far apart. So you often see business owners and entrepreneurs turning to…

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Business Valuation - Bean Counting

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We'll discuss the preliminary agreements associated with the purchase and sale of a business, such as non-disclosures, term sheets, and letters of intent.

For the purpose of this series, we’ll refer to the party selling the company as the owner, and the party acquiring the company as the purchaser. If you read about these transactions in other blogs or articles you might find the selling party referred to as the target company and the acquiring party as the acquirer.

In the preliminary stages of the purchase and sale of a business there are a few primary concerns: (1) the owner wants to make sure that the potential purchaser is serious, (2) the owner wants to make sure the secrets of his or her business are not compromised, (3) the purchaser wants to make sure the owner is serious about selling the business, and (4)…

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We've put together a blog series to let you know how the purchase and sale of a business process works.

The purchase and sale of a business is one of the most important transactions for business owners. We’re starting a blog series to let you know more about how the process of purchasing or selling a business works. As a side note, lawyers often call these types of transactions mergers and acquisitions, especially when referring to transactions involving extremely large companies. Mergers and acquisitions are essentially just the purchase and sale of a business but generally on a larger scale and with more moving parts.

We’re going to discuss the purchase and sale process from start to finish. For each post we’ll explain what’s at stake and how legal counsel can help you. For this series we have scheduled posts on…

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Buy Sell Agreements are important for pre-determining the rights and obligations of remaining owners, departing owners, and other interested parties.

A Buy Sell Agreement is a legal contract between the owner(s) of a business and the entity, to purchase and sell interests in the business at a pre-determined price if certain future events occur (e.g. death, disability, outside party purchase offer, or termination of employment). The Buy Sell Agreement can help ensure a smooth transition for the entity, remaining owners, and departing owners of a business.

Benefiting the Entity
There are a number of reasons why you may want to have a Buy Sell Agreement drafted for your business. The business may want to prevent unwanted or adverse third parties from acquiring an ownership interest in the entity. You can structure the Buy Sell Agreement in a way that triggers an buy-out…

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Aside from choosing what form of entity for your business, one of the most important considerations while forming a company is the exit strategy.

Aside from choosing what entity to form your business as, one of the most important considerations in the early stages of forming a company is the exit strategy. Ironic as it may sound, deciding how to get out of the business in the beginning will save you and your business partners time and money down the road. As we’ve discussed throughout our series on LLC Operating Agreements, there is a lot of flexibility when deciding what provisions to include in your operating agreement. It’s no different when deciding on exit strategies, restrictions, and procedures for your LLC. Some LLC operating agreements are silent on this point, while others include extensive restrictions and procedures for getting out of the company. Today’s…

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Considering Your Exit Strategy- It’s Never Too Early to Start Planning Your Business Exit Strategy

When starting a business and creating a business development strategy, many entrepreneurs and business owners forget one of the most important considerations: the exit strategy. Especially at the beginning, it’s not easy to think about how your business will end. However, when your business is just starting out, it is often the best (and least complicated) time to discuss an exit strategy. At this point, your business is small (in number of employees and cash), there aren’t significant liabilities, and the business has only a few contracts with individuals outside the company. It will become increasingly difficult to discuss exit strategies as your company grows in size financially and in the number of employees, investors, and shareholders. Today we’ll lay…

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