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If you are a minority shareholder of a corporation or a minority member of a limited liability company and you are thinking about bringing a lawsuit against the majority shareholder(s)/member(s), it is important to determine whether the lawsuit would be: (1) a direct action; or (2) a derivative action. This determination is critical because the two types of claims have different elements of proof and different procedural prerequisites. To maintain a direct action, the plaintiff

In New Jersey, the Uniform Partnership Act defines “partnership property” as property in the name of: the partnership; or one or more partners with an indication in the instrument transferring title to the property of the person’s capacity as a partner or of the existence of a partnership but without an indication of the name of the partnership. Additionally, property is presumed to be partnership property if it is purchased with partnership assets. For example,

In the age of the internet, it is incredible easy to find out information about the people and companies that we do business with. It has become common for businesses to conduct background checks on potential employees, but it is not necessarily common practice for a business to conduct routine background research on landlords, customers, and vendors. Employing such a practice could save you significant time and money down the road. For example, even if

If you own a small limited liability company or closely held corporation, it may seem burdensome to comply with all of the requirements in your company’s governing documents (such as an operating agreement). For example, it may be inconvenient to hold annual shareholder meetings or to maintain all corporate records at a specific location. It may also seem unnecessary to maintain a separate bank account for the company (and to never commingle the funds between

A large number of business disputes involve an alleged breach of an agreement between the parties. The first question the courts will consider when presented with such a dispute is whether there is legally recognizable contract between the parties. To establish that a contract exists, a plaintiff must prove that: there was a “meeting of the minds”: (in others words, an actual agreement was reached); one party offered to enter into the agreement and the

If you are a shareholder in a company, it is important to know your rights. Otherwise, you could be taken advantage of and miss out on opportunities for more profit or benefit from your investment position. One of the key concepts you need to understand is shareholder oppression. What is Shareholder Oppression? When majority shareholders in a company take actions that prejudice the minority shareholders, this is considered oppression. This happens particularly often in closed

Under New Jersey law, a partnership can be formed in the absence of a written agreement. Without a written agreement, it is not always clear whether an individual is a partner of the business even when the individual holds himself out to be a partner and receives a share of the profits from the business. Pursuant to the New Jersey Uniform Partnership Act, a partnership is “an association of two or more persons to carry

Starting a family business is a time-honored tradition and a sense of pride for many families. However, it can also be a nightmare. Whether your business is the latest Asian-fusion restaurant or a construction company, hiring the services of a business law firm such as Spector & Ehrenworth, P.C., can help keep your family relationships intact and your business running smoothly. Here are seven pitfalls that a business lawyer can help you avoid if you

The grounds upon which a partnership may be dissolved are typically set forth in a written partnership agreement. A partner may file an application in the courts to dissolve the partnership if the grounds for dissolution, as set forth in the partnership agreement, have been met. In addition, the New Jersey Uniform Partnership Act permits any partner (even if there is no partnership agreement) to file an application in the courts to dissolve the partnership