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North Canton, Ohio legal blog

What is the difference between mergers and consolidations?

Once you have made the decision to join your business with another business, under Ohio law you are legally able to combine two or more entities into a single entity. Yet you still have a choice to make, and one of those choices is whether or not to undertake a merger or a consolidation. But what is the difference between a merger and a consolidation, and why choose one over the other?

Per the Ohio Secretary of State, a merger is when one or more business entities merge into a single surviving entity. For example, if you have Company A, Company B, and Company C, and Companies B and C merge into Company A, then Company A continues to exist with Companies B and C as a part of it. During a merger, essentially other corporate entities become a part of an existing entity. This can be useful for smaller companies merging into larger companies that have greater brand recognition and market traction.

Why do you need a partnership agreement?

When you and your business partner decide to establish a legal business entity, you may have high hopes and strong projections for the success of your partnership. Yet you may hear recommendations to establish an ironclad, legally binding partnership agreement when you file your business partnership in Ohio. But why would you need a partnership agreement?

In short, circumstances change. Your relationship with your business partner may go sour, or circumstances outside your control may force one or both of you to pull back from the business. You may disagree about the direction the business should go in, or the market may shift unexpectedly. As the U.S. Small Business Administration says, when there is any form of conflict in your partnership, having a partnership agreement can define the framework that helps resolve disagreements to the satisfaction of all parties involved. It can also maintain transparency and accountability when there is disagreement on how a situation can be handled.

is there an oil and gas lease on my property?

Matters concerning land ownership and leasing can be complicated and involve leasing and rights stretching back years, if not decades. You may have a development or non-development lease on your Ohio property, and not even know it - particularly if your property is situated in the highly coveted Utica Shale region. So how can you find out if you have a lease on your land already, and who owns the rights to that lease?

One of the quickest ways to know, according to the Ohio Department of Natural Resources Division of Oil & Gas Resources, is to discover an unplugged well on your property. If you have a producing well on your property, there may well be a lease in effect. In absence of physical evidence, you are easily able to either check with the county recorder's office for a copy of any existing lease, or conduct a title search on your property to uncover any lease information.

When is it illegal to know trade secrets?

You guard the secrets of your Ohio-based business fiercely, and those secrets are instrumental in the viability and profitability of your enterprise. So when someone gains access to your trade secrets, they could stand to profit off the time and labor you put into acquiring that knowledge and perfecting your strategy. That person may be a rival or an employee. But is it illegal for anyone to simply know information about your business?

It depends on the method of acquisition. Per Ohio legal codes on trade secrets, when someone gains unauthorized access to and knowledge of trade secrets, this is known as misappropriation. Misappropriation can happen when someone knowingly commits a breach of trust by accessing information through physical or electronic espionage, or other deceptive practices. The person must have deliberately gained improper knowledge of your trade secrets; they may also have used them for self-advancement, or disclosed them to others to create a situation that may weaken your position as a business.

Insurance companies aren't trying to protect you after a crash

You've paid a liability insurance premium in order to drive your vehicle since you first got your license and a car. You may have gone decades without needing to file a substantial claim for coverage. Thanks, in part, to slick advertising copy that emphasizes how insurance companies are there for their clients after a crash, many people assume their insurance company will seek to protect them when they file a claim.

In reality, insurance companies will often do whatever they can to limit their liability on a claim. That can include tricking policy holders into admitting some degree of responsibility for a crash or offering offensively low first settlement offers. In the wake of a motor vehicle collision, you need to take great care when interacting with your insurance provider.

What business legal structures are available in Ohio?

When you form a new business, you have a number of options for how to legally structure that business. Some states handle business structuring differently, however. So as an aspiring business owner, what are your options for business structuring in Ohio?

Per the Ohio Small Business Development Centers guide on starting your own business, your options are: sole proprietorship, limited partnership, limited liability partnership, general partnership, profit or non-profit limited liability company, or profit, non-profit, or professional corporation. Each of these business types carries different tax obligations and structures, and each requires that you register a legal name for your business.

Consider your will when getting a divorce

Previous posts on this blog have detailed the need for you to see to your estate planning while you still can. If you have already completed this process by creating a will, congratulations. However, you should know that the word "completed" used in this context is misleading. We here at Baker, Dublikar, Beck, Wiley & Mathews are constantly reminding our clients that the estate planning process is never truly over. As the years pass, your circumstances in North Canton are bound to change. Many of those changes should prompt you to revisit your will and update its terms to reflect your current situation. 

Say, for example, that you and your spouse create a will, but then you later divorce. If you never amend your will and leave your ex-spouse as your primary beneficiary, does that mean that he or she will inherit your estate assets when you die? Fortunately, Ohio lawmakers have foreseen such a scenario and thus enacted legislation to address it. In Section 5815.33(B)(1) of the state's Revised Code, it says that an annulment or dissolution or marriage automatically revokes any terms of your will that designate your ex-spouse as a beneficiary. In a legal sense, he or she is viewed the same as if he or she had preceded you in death. 

If someone dies intestate, what does the surviving spouse get?

When you are grieving the loss of your beloved spouse, the last thing you want to worry about is a battle over his or her estate when they died intestate, or without a will. Ohio state laws offer rules regarding statutes of descent and distribution that, as long as no other surviving relatives or heirs contest distribution, could remove this burden from your shoulders. But how do these rules affect you as the surviving spouse?

The website detailing Ohio's laws and rules outlines the basics of descent and distribution in the event that your spouse died without a will. If there are no surviving relatives other than yourself, then you are eligible to receive the entirety of the estate after any debts and expenses are paid from the estate. If you and your spouse have surviving children where you are both the biological or adopted parents of the children, then you also receive the entirety of the estate.

How does use tax protect against unfair competition?

As a business owner, you may be familiar with both unfair competition and with use tax; unfair competition is when another business uses unscrupulous means to infringe on your business or otherwise gain an advantage, while use tax is an equivalent to sales tax to ensure used or stored items that were not taxed under Ohio sales tax law but are not exempt are appropriately taxed. But how do the two tie in to each other?

The Ohio Department of Taxation elaborates that without use tax on purchases made from out of state vendors, businesses in other states could unfairly compete with yours. The lack of sales tax would entice customers to shop out of state rather than turning to local businesses such as yours, which would collect sales tax. This is considered unfair competition, while also allowing consumers to unethically dodge sales tax. Use tax seeks to remediate this by ensuring that taxable items are appropriately taxed, so that there is no unfair discrepancy between items purchased in-state or items purchased out of state.

Undue influences: Challenging changes to a will

Undue influence is defined as influencing a person's freedom of choice with his or her own choices. This could be a result of duress, where a person forces the other to make changes to his or her will or trust, coercion or necessity. The problem with undue influence is that it impacts people's estates. It may put their beneficiaries out thousands of dollars, and it could result in legal challenges.

For people who suspect undue influence, it's necessary to prove it took place. Otherwise, it won't be possible to contest the changes in most cases. You'll have to show that your parent or loved one was in the position to be unduly influenced. You'll also have to show that the other person had something to gain by influencing your loved one's estate. Finally, you're going to need to show that there was an opportunity for this influence to occur.

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