How to handle business disputes

Benjamin Franklin is credited with the axiom that “nothing is certain except for death and taxes.”  Another thing that is certain is conflict. Conflict is inevitable among business partners, spouses, family, and friends but conflicts in the workplace can be particularly difficult to resolve. Here are some tips and techniques that you can use to deal with conflicts at the workplace (and at home).

Active Listening

Don’t just listen, engage in the conversation.

Ask Open Ended Questions

Open ended questions are questions that require the respondent to answer in their own words – more than a simple yes or no answer.

Use Mirroring

Mirroring helps to facilitate empathy.

Seek Common Points of Interest

Common ground provides an important pathway for communication.

Develop a Plan for Next Steps

Ideally, you will resolve the conflict and, as a result, your relationship will grow. Sometimes, however, the best path forward is a divergent path. Whatever you decide, plan your next steps.

Document the Resolution

Writing down what you have agreed to will ensure that everyone’s expectations are aligned and will reduce the likelihood of further conflict, at least as to the issue(s) that you just resolved.

Conflict is likely to occur in any business relationship regardless of how well you get along with your partners. Fortunately, there are many strategies that may help to resolve a dispute in a timely and amicable manner. Using these strategies may ensure that your New Jersey company doesn’t have to close or experience lasting damage to its brand because of a disagreement.

How to stay safe while driving during the fall

Fall in New Jersey means crisper air and beautiful colors as the leaves turn. Seasonal changes can also lead to more car accidents.

Falling leaves

Falling leaves are a regular fixture during the fall. When they fall into the road, they can make it slippery. If your vehicle cannot maintain traction over the slick leaves, you can get into a car accident. You should avoid parking your car near a pile of leaves and be aware that leaves can gather and conceal road hazards like potholes.

Glare from the sun

During the fall, the sun sets earlier, so there’s a good chance you’ll have to deal with it while driving. By the time work lets out for many people, the sun hangs lower and can hit your windshield or even your eyes, which can be blinding. This all makes it easier to get into a collision. Sunglasses can help with this problem. If you wear glasses, lenses that darken in the sun are helpful.


The fall is when the first frost occurs. Temperatures dip at nighttime, which means the roads might be icy the next morning. Driving can be challenging in such situations. You can stay safer by slowing your speeds and staying farther behind the vehicle directly ahead of you.


Fog is more likely in the fall, which means decreased visibility. Be especially careful while driving. Use your low beams, slow your speed and be extra cautious at all times.

Tire pressure

As the temperatures grow cooler in the fall, you should check your tire pressure more. The changing temperature means that your tires can lose inflation more quickly. If your pressure is low, get to your nearest service station to refill your tires.

Be aware of these hazards during the fall. Awareness can help you drive more safely and avoid accidents.

The basics of corporate structure

Please note that this is a general overview of corporations, what they are, and how they function.  As with most legal questions, there are exceptions and nuances that we will not discuss here.  If you are thinking about forming a corporation it is always advisable to seek the advice of a licensed attorney.

Advantages of Incorporating

Corporations are legal entities designed to pool the efforts, resources, and expertise of many individuals into a collective operation.  And, perhaps more importantly, provide a layer of protection for the shareholders, directors, and officers from the liabilities of the corporation.  This protection is not, however, absolute.  The most notable exception is the legal principle often referred to as “piercing the corporate veil.”  This is a complicated area that is beyond the scope of this article but underscores the notion that the protections offered by the “corporate veil” have their limitations.

Where to Incorporate

Where you chose to incorporate is critically important and must be carefully analyzed.  Corporations are created under and governed by state statutes.  Those rules are further refined by the courts.  Statues and caselaw dictate a variety of critical issues such as whether and to what extent shareholders owe fiduciary duties to one another, what duties directors and officers owe to the corporation and its shareholders, and whether those duties can be eliminated.

The Shareholders

The shareholders are the “owners” of the corporation.  Large, publicly-traded companies might have millions of shareholders and tens of millions of shares outstanding. By contrast, the stock of a closely-held corporations is owned by a few people shareholders.  Most corporations in the United States are closely held corporations with a limited number of shareholders.

A quick word on Shareholders’ Agreements or Buy-Sell Agreements.  It is highly advisable for the corporation’s shareholders to negotiate amongst themselves and execute a Shareholders’ Agreement.  A corporation or other type of entity (like an LLC) can own stock in another corporation.  Shareholders’ Agreements provide the framework for the relationship by and among the shareholders and cover critically important issues like voting, management, money, and exit.  Many statutes will defer to the Shareholders’ Agreement on these critical issues.  The provisions in the statutes are looked to only if there is no Shareholders’ Agreement in place.  Often the statutory provisions will result in unfavorable results, thus emphasizing the need for a Shareholders’ Agreement.

The Board of Directors

Directors are “elected” by the shareholders.  Directors dictate and oversee the corporation’s general objectives; they focus on the “big picture” and provide direction to the officers of the corporation. It is generally advisable to have an odd number of directors to avoid a deadlock situation, which results in no clear majority.

The Officers

Officers are “appointed” by the directors.  Officers are responsible for implementing the corporation’s general objectives and are generally responsible for the day-to-day operations of the corporation. Officers report to the directors, who, in turn, report to the shareholders.  There are certain required positions that must be filled and other optional positions, but these will vary by state and statute.  Most corporations are required to have a President, Treasurer and Secretary.  Other optional positions include Chief Executive Officer (position often held by the President of the corporation), Chief Operating Officer, Chief Financial Officer, Chief Technology Officer, and the ubiquitous position of Vice President.  The number of officers a corporation has can vary widely depending on the size of the Corporation and the specific industry of the corporation.

An individual can hold one or more positions as a shareholder, director and/or officer.

Is your business prepared to face a lawsuit?

When a prepared business in New Jersey first gets news of a lawsuit, they should always have a plan in place to handle the fallout. This usually includes managing the company’s reputation, minimizing the legal costs and taking steps to possibly avoid business litigation altogether. When an unprepared company in New Jersey faces legal trouble, they are often left scrambling for the next steps.

For example, there are situations where a business owner can talk to the person threatening legal action against the company. Appropriate mediation in these instances can lead to a swift resolution. In other circumstances, it may be essential that the business owner not communicate with anyone involved. A business owner will need to speak to their attorney to decide on the right course for the best outcome.

Every case of business litigation in New Jersey will be different. Some small business lawsuits are civil while others may be criminal cases. Still, it’s possible to prepare your company to handle a variety of threats ahead of time with an established process in place.

What steps can a business owner take to prepare for business litigation in New Jersey?

Meet with a lawyer to discuss the details of your business. A waste disposal company will need to take different steps to legally prepare than a doctor’s office. For this reason, it’s good to get individual legal advice for your business in your physical location.

Always keep accurate records for your company. While many do this for financial reasons, it’s also a good practice in case of business litigation.

Secure business insurance that covers the potential liabilities in your business. This may include property damage, bodily injury for employees or customers and any specialized insurance required by your industry.

Ideally, business litigation would never be necessary. The reality is that businesses face lawsuits regularly. It’s better to be calm and prepared for the possibility so that your company can continue to work while the legal process plays out.

Reckless driving puts people in danger

Civil court juries may have little sympathy for a reckless driver, especially if the driver’s behavior cost someone their life. Yet, many motorists take dangerous risks on New Jersey roads. No matter how much a reckless driver attempts to justify their behavior, causing an accident when committing this type of a moving violation may prove challenging to defend.

Reckless driving and inflicting injuries

When the actions of motorists present a blatant or deliberate disregard for others’ safety, they may be guilty of reckless driving. In many instances, a combination of impatience and poor judgment leads to reckless driving. For example, a driver who crosses a double line and travels in the wrong direction on a single-lane highway risks a head-on collision. Similar dangers may exist when driving on the shoulder or sharing lanes.

Speeding might be the most common form of reckless driving, and many people lose their lives in collisions caused by speeding drivers. Drunk driving inflicts terrible costs on bicyclists, motorcyclists, pedestrians and other drivers. Yet, thousands of drunk driving arrests continue to occur.

Reckless driving could result in life-altering harm, including spinal damage, brain injuries, organ damage and severe disfigurement. Tragically, many people die in fatal accidents spawned by reckless driving.

Losses and reckless driving

Catastrophic injuries may leave the victims suffering from financial devastation. Even those dealing with soft tissue damage and other minor injuries could deliver losses from missed work and medical care. A fatality might devastate families emotionally and financially, and they could seek compensation for any losses by filing a wrongful death lawsuit.

Police and medical reports could provide compelling evidence in court. So might eyewitness testimony. Such evidence may help sway a jury or convince a defendant to settle out of court.

What you need to know before agreeing to arbitration

Arbitration is a legal method of resolving New Jersey workplace conflicts that can be an alternative to taking a case to court. It can be a better way for you as an employee to handle your workplace dispute, but there are some drawbacks that you should be aware of.

Who gets the final say?

A potential drawback of arbitration is you have to abide by the arbitrator’s final ruling just as you would if the case was litigated in a courtroom. The arbitrator is an impartial third party that you and your employer choose to handle your conflict resolution. They provide a written copy of their final decision to ensure that both parties abide by the terms without any questions about the details.

Stating your case

Arbitration sessions take place in person. You may also bring in witnesses and present evidence to support your case. Arbitration may also include private sessions with the involved parties.

Requesting arbitration

If you and your employer decide to go through arbitration, you will need to submit a request to the New Jersey State Board of Mediation (NJSBM). You must include the contact information of all involved parties and outline the issue that you are arbitrating.

The pitfalls of arbitration

Although arbitration can present many advantages to traditional litigation, there can be some downsides as well. These include:

  • Arbitrators often have other occupations, which means that your case might be delayed if they have time conflicts.
  • Arbitration only works if all parties to the dispute respect the process and act in good faith.
  • While it is often thought of as a cost-saving alternative, arbitration can be – in certain situations – just as expensive as a courtroom trial, and in some cases even more so.

Unlike a trial, arbitration hearings are private. In the event that you prevail and are awarded damages by the arbitrator, you will generally need to go to court to have the judgment enforced.

How are New Jersey businesses impacted by the CTA law?

Most New Jersey business owners are probably aware of the Corporate Transparency Act (CTA). This is the law that requires that all owners report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN).

Hypothetically, this law would make it harder to operate anonymous shell companies. Usually, federal reporting was reserved for large corporations, but the CTA impacts smaller companies as well.

Who is considered a beneficial owner?

A beneficial owner is anyone who controls at least 25% of the ownership interests. This can be through direct ownership (a co-owner) or indirect ownership – a contract, arrangement, etc.

There are some exceptions as to who is considered a beneficial owner. This includes minors, employees or creditors.

How do you report this information?

FinCEN collects names, addresses and other identifying information for each company’s beneficial owner that’s reported. This information will need to be updated with FinCEN annually after January 1, 2022.

In addition, business owners will have to report when their company was formed. There is some leniency on reporting all of this information for companies that were formed before CTA was passed, but they still will have to get these reports in within two years of the deadline.

What are the penalties?

Companies that don’t report this information – or report false information – might face fines and penalties. CTA violations may have a penalty of $500 for each day the violation continues or criminal fines up to $10,000.

Business owners can also go to jail for up to two years, depending on the severity of the CTA violation. Unauthorized disclosure of beneficial ownership information is also subject to penalties and imprisonment.

It can be overwhelming to suddenly have to report this information or change how your company is run. It’s important to seek outside help from a lawyer to make sure your company is in the clear and not committing any CTA violations.

Premises liability in New Jersey: Determining who’s at fault

The 2013 New Jersey Revised Statutes Section 2A:42A-8.1 states that a property owner owes a duty of care to people legally on their premises. But, if someone gets injured while on their property, the fault doesn’t always automatically fall on the owners.

When property owners are held liable

Property owners are legally obligated to take measures like setting up signs for potentially dangerous areas, repairing known issues, and providing adequate lighting in common areas. If they don’t do these things and you get hurt as a result, then they can be held liable for your personal injury.

For example, if you slipped on a wet floor at the grocery store and there was no “Wet Floor” sign, the store could be held responsible. The same goes for if you were walking down a set of stairs that wasn’t well-lit and you tripped because you couldn’t see where you were going. In both cases, the property owner didn’t take reasonable steps to keep visitors safe so that they would be liable.

When property owners aren’t held accountable

In some situations, the owner wouldn’t be held liable even if an injury occurred on their property. This is usually because the visitor was acting in a way that wasn’t reasonably safe. For example, if you were trespassing on someone’s property and got hurt, they wouldn’t be held responsible.

When filing a personal injury lawsuit against the premises owner, the law requires you to show how negligent they were in making their property safe for you. This can be done by providing evidence that the property owner knew or should have known about the hazard and didn’t take steps to fix it or warn visitors. Then, you will need to prove how their negligence was a substantial factor in causing your injuries. If the judge rules in your favor, you may be able to recover compensation for your medical bills, lost wages and pain and suffering.

What to know about selling your company

Selling your business is a complex and lengthy process that requires careful consideration of many factors. Having a good team of advisors is essential.

The sales process will likely take several months to complete. Ideally, you will start preparing for the sale six to 12 months before you start the sales process. Working with a broker is a good idea if you are unfamiliar with the process and may allow you to complete the transaction in a timely manner and get a fair price for your company.

In addition to working with a broker, you will want to consult with other advisors to help facilitate the sale, such as an attorney, accountant and business appraiser.

Determine why you want to sell

Prior to starting the process of selling your company, you should think about why you want to do so. Typical reasons include a change in circumstances, a desire to retire or disputes among the owners. Having a clear vision as to why you are selling your company will help to focus your decisions and make the process much more efficient.

What are you selling?

Generally, when selling your company, the deal will take the form of an “asset” sale or a “stock” sale. An asset sale involves the sale of the assets of your company (such as machinery, equipment and inventory). Alternatively, in a stock sale you will sell the shares of stock in your corporation or LLC that owns the assets.

There are many differences between an asset sale and a stock sale, so you should seek the advice of a lawyer, as well as an accountant, when considering which would be more suitable for you.

How to prepare the company for sale

Selling a business is like selling a house in that you need it to look its best before going on the open market. This means ensuring that you have streamlined operations, minimized costs and addressed any open legal issues with your company.

The closing process

The “closing” is when ownership of the business is actually transferred. The closing process can become hectic as you near the end of the sale. Having a good team of advisors will ensure a smooth transition.

The closing can happen at the same time as the signing of the contract of sale. You can also choose to have a “dry closing,” where you sign the contract of sale first, then conduct due diligence, arrange for financing and complete the closing process.

What is an LLC operating agreement?

When starting a business, there are many things to consider. One of the first decisions that you will have to make is what type of entity you want to form. Is a limited liability company (LLC) better than a corporation? What about a sole proprietorship or partnership?

To further confuse things, some states offer the option to form a limited liability partnership (LLP) or professional limited liability company (PLLC). The pros and cons of each type of entity are varied, complicated and require the advice of legal counsel and tax professionals.

Preparing an operating agreement

As an example, let’s say that you and your business partners decide that an LLC is right for your business after consulting with your lawyer and your accountant. Having done so, one of the first things that you will need to do is to work with your attorney to prepare an operating agreement.

What’s in a name? Well, it is usually simply referred to as an “operating agreement” (the reference to LLC is not necessary but is sometimes used). Some states, like Delaware, refer to it as a “limited liability company agreement.” The name of the agreement, however, does not affect any of the rights, duties and obligations of the parties to the agreement.

What is an operating agreement? An operating agreement is an agreement among the members (i.e., owners) of the LLC and the LLC itself. Yes, the LLC should be included as a party to the agreement since it is a separate legal entity (separate from the partners), but more on that later. The major points of the operating agreement address ownership, voting rights, management, money and the “exit.”

Resolve conflicts before they begin

One of the most important functions of an operating agreement is how it works as a vehicle for conflict resolution. Most conflicts arise from a misalignment of expectations.

For example, you might expect to be the CEO of the company and earn a large salary, but so might your partner. Working through the provisions of the operating agreement will allow for an open dialogue about what each of you expect from the partnership, therefore reducing potential conflict. Should a conflict arise, you will be able to turn to the operating agreement for guidance.

What if I don’t have business partners?

One interesting quirk about operating agreements is that even if you are “single member” LLC – meaning you are the sole owner of the LLC and have no partners – it is still advisable to have an operating agreement. But why? One of the main reasons why people incorporate a corporation or form an LLC is for the protections, or “limited liability,” that these entities provide business owners.

As a general rule, the shareholders of a corporation and/or members of an LLC are not personally liable for the debts and obligations of the corporation or LLC. In order to enjoy this protection, the shareholders and members must respect the separate legal status of the corporation or LLC.

One of the elements that a court will look at is whether you have an operating agreement. Since the LLC is a separate legal entity, even if you are the sole owner, you still need an agreement with the LLC to cover how the LLC will operate.

Working with your attorney to draft an operating agreement takes time and requires a lot of from you, the client. However, it is a critical first step in your journey as a business owner. By taking the time to draft a well-crafted operating agreement, you can minimize problems down the road and make sure that everyone knows their rights and responsibilities.