Business Dispute Lawyer Tampa, FL
Our Tampa, FL business dispute lawyer business owners trust has represented many clients who ended up in business disputes over business loans. Personal guarantees for business loans are often required by banks and other lending institutions. When a business owner applies for a loan, they must often personally guarantee the loan will be repaid, even if the business owner has to use personal assets to do so.
For corporations with multiple business owners, some banks will ask for a personal guarantee from each owner. At times, even spouses of business owners are asked to co-sign a personal guarantee. If the terms of the guarantee are not fully understood, a business owner can be made vulnerable to a potential personal bankruptcy situation when the loan is due. This is one reason why it is so important to have a business lawyer examine any lender contract you are considering entering into before you sign it.
Personal Liability Extends Longer Than Many Business Owners Realize
A common problem with personal guarantees involves businesses with multiple owners. If one owner leaves the business, they may still be liable for any loan guarantees that they committed to. If their past business venture fails, even years down the road, under the terms of standard loan arrangements, their personal guarantee can be called up to pay off the remaining balance on the loan. This also applies to any loan restructuring that occurs, even if the former owner was not involved in the renegotiation process. Once signed and notarized, a personal guarantee extends until the initial loan (plus any renewals or credit extensions) has been completely paid in full.
Business Owners Do Have Options
A Tampa business dispute lawyer knows that for businesses with joint ownership, co-signees have the option to sign the promissory notice itself versus drafting a personal guarantee. This provides a better level of protection because the owners will no longer be liable for any remaining balances if the loan is renegotiated or rolled over.
Some lending institutions will negotiate the terms and settlement of a personal guarantee for both current and former business owners. In certain cases, if the owner undergoes asset protection planning, they can be protected from having to repay the entire amount stated on the guarantee. However, the majority of the remaining loan balance will still need to be repaid.
Contact a Business Law Firm for Legal Assistance
Business owners should obtain a professional review of any business loan agreements asking for or requiring a personal guarantee by a business lawyer. All terms and conditions must be carefully reviewed, and all business loans should be negotiated to obtain satisfactory terms for all parties involved.
If you already find yourself dealing with issues for a loan you have entered into, call a Tampa business dispute lawyer to find out how we can help. Please call Hoyer Law Group, PLLC today for a consultation.
As a Tampa, FL business dispute lawyer from Hoyer Law Group, PLLC can explain, at its core, a nonprofit corporation (also called a not-for-profit organization), is a legal entity formed under (and in compliance with), the corporation laws of its state. It is established to provide a service or benefit rather than to make a profit. Any profit it makes must be delivered back into the entity, and not taken by an individual for his or her own gain. In other words, a nonprofit has no shareholders per se; consequently, there is no one to whom to distribute dividends. Many kinds of nonprofits exist, including the following:
- Public benefit organizations that are mission or value driven, such as Kickstarter, Plum Organics, Giving Assistant, etc.
- Mutual benefit organizations, such as labor unions, chambers of commerce, veterans’ groups, etc.
- Religious organizations, such as churches, synagogues, interfaith groups, etc.
- Charitable organizations, such as the Red Cross, Catholic Charities, United Way, the Salvation Army, etc.
- Political organizations, such as Green Tech Action Fund, Republican Jewish Coalition, League of Conservation Voters, etc.
- Social clubs, such as college fraternities and sororities, country clubs, dinner clubs, etc.
- Consumer cooperatives, such as credit unions, housing cooperatives, utility cooperatives, etc.
Some, but not all, nonprofit organizations elect to become 501(c)(3) organizations, a special tax-free status granted by the Internal Revenue Service. In order to prevent problems from arising, it is essential that you meet all the requirements to operate under this organization type. To qualify, your Tampa business dispute lawyer can make sure that you have one of the following types of purposes:
- Public safety
- National or international amateur sports competition
- Prevention of cruelty to children or animals
- A charitable purpose, in turn, can include such things as the following:
- Providing relief to poor, distressed or underprivileged people
- Erecting and/or maintaining public buildings, monuments, etc.
- Eliminating discrimination and prejudice
- Defending human and civil rights
- Combating community deterioration
A 501(c)(3) organization is not only exempt from paying income taxes, but also sales taxes. In addition, its donors can deduct the amount of their donation from their income taxes.
Setting Up a Nonprofit
If you’re interested in starting a nonprofit corporation, and want to ward against problems from developing in the future, then your first step should be to seek the advice and counsel of a Tampa business dispute lawyer. We can not only help you choose an appropriate and available corporate name, but also advise you of all the things you must do to form a corporation in your state. After drafting your Articles of Incorporation and Bylaws, we can then walk you through the process of filing your corporation with your state’s secretary of state’s office and obtaining your corporate seal. Finally, if you wish to become an A 501(c)(3) organization, we can help you do so. Don’t hesitate to reach out to us at Hoyer Law Group, PLLC for further business related guidance!