Partnership and Operating Agreements

A partnership and operating agreement is an internal-affairs governing document that establishes functional roles and financial responsibilities of owners, members, and/or managers. Operating agreements clarify verbal agreements during your business formation or modification process. Additionally, operating agreements serve as a shield for the company against personal liability. Without an operating agreement, your business might resemble a sole proprietorship or partnership, thus potentially jeopardizing your members to personal liability.

Typical operating agreements contain provisions on powers and duties of members and managers and distribution of profits and losses, however, there are no specific guidelines on the contents of an operating agreement. Each business is unique, and their operating agreement should be tailored to reflect the operations of their limited liability company (LLC.) Only six states (California, Delaware, Maine, Missouri, Nebraska, and New York) legally require LLCs to have an operating agreement, however, it is highly recommended for all businesses to create an operating agreement to protect owners from personal liability and to organize primary functions within one key document. Operating agreements establish internal transparency and serve as a company’s roadmap for handling large business decisions. Our firm would be delighted to assist your business in creating a valid and enforceable operating agreement.

Business Transactions

Business transactions cover a large category of corporate and business law. Our firm is equipped to handle mergers and acquisitions, business entity formation, contract development and review, and other business transactions. Business transactions can range from lease negotiation to licensing agreements. A large portion of our clients became clients while they were forming their business, and we still continue to handle their business transactions as they have flourished here in the Lowcountry!

Intellectual Property

As businesses form and grow, it is almost inevitable that companies will have to seek intellectual property law protections. Intellectual property has fostered innovation as patents protect inventions, copyrights protect literary and musical work, and trademarks protect slogans and logos. While patents and copyrights are issued by the federal government, trademarks can be issued by state. In South Carolina, the Secretary of State’s Office registers and renews trademarks. Whether you are trying to protect your business’s brand or defend your artwork, our firm is able and ready to assist you in protecting your intellectual property.

Contract Drafting and Review

Contracts are legally binding agreements. While contracts can be orally constructed, important contracts, including contracts related to your business, should be written and signed by both parties. Contracts are the epicenter of the small business and corporate world. Drafting a contract includes writing out the terms, fees, conditions, and functional duties of all parties involved. Examples of common business contracts are service agreements, confidentiality agreements, non-compete agreements, and independent contractor contracts. If you already have a binding contract, it would be advantageous to have an attorney review your contract to explain the dangers of contract breach and other complicated provisions.

Strategic Entity Formation and Conversion

Charleston, South Carolina has been voted the #1 Best City in the United States for the seventh year in a row. South Carolina is notorious for its rich history, aesthetic window boxes and colorful houses, and most importantly– tourism. The restaurant business is booming year round, and the Lowcountry is growing to be a magnet for manufacturing as Boeing, Volvo, and the Charleston Port Authority employ thousands of South Carolina workers. Additionally, with the Joint Charleston Military Base and the Medical University of South Carolina, Charleston’s economy is impressively diverse.

Starting your business in South Carolina has never been easier. Whether you are forming a business corporation, non-profit, or limited liability company (LLC), we will guide you through the statutory requirements to have your establishment up and running.

Shareholder Agreements

A shareholder agreement is a governing document that details the functional duties and roles of shareholders within your company. Most importantly, the agreement details the decision-making process of shareholders. Furthermore, the shareholder agreement outlines profit shares, regulations of sale of corporate shares, and the processes for when shareholders leave the company– voluntarily and involuntarily. A shareholder agreement should complement your company’s organizing document and bylaws. The main goal of the agreement is to equitably and fairly safeguard shareholders while protecting the company at large.

Dissolution

Sometimes there comes a time when businesses have run their course and are ready to dissolve. This can be due to retirement, other business prospects, or business failure. In South Carolina, you must (1) close your business’s tax accounts, and (2) file articles of dissolution pursuant to S.C. Code § 33-14-103. The filing fee for South Carolina LLC Articles of Dissolution is $35.00. Your business could potentially still owe unemployment insurance tax, employee withholding tax, and/or sales & use tax. It is important to have a legal guide walk you through the process of properly dissolving your business to avoid liability.

Succession Planning

Succession planning is strategizing, identifying, and developing plans for future leaders and managers within your business. Succession planning is a process that ensures your organization will run smoothly after certain people leave their positions. This form of planning assesses your training programs, develops how you evaluate performance reviews, and addresses potential roadblocks for business growth. Having an attorney perform a comprehensive review of your organization can help you efficiently streamline turnover processes and protect your business in the short term and long term future.

Corporate Governance

Corporate governance is the system and process by which companies are controlled and directed. Typically, the board of directors are primarily responsible for governing their organizations. It is the duty of the shareholders to appoint the directors and serve as a check and balance to the board. Strategic corporate governance reinforces transparency and accountability within your organization’s leadership. Having an attorney serve as a third-party legal guide eliminates the conflict of interest between shareholder and upper management. Our lawyers serve as counselors and consultants that will review your company regulations, management communication, and best practices for efficient operation.

Trademark Applications

A trademark is “a word, phrase, symbol, and/or design that identifies and distinguishes the source of the good of one party from those of others.” Additionally, service marks are similar to trademarks, but instead of representing a good, it represents a source of services. However, both terms are traditionally referred to as trademarks. You can register your trademark with the United States Patent and Trademark Office, or you can register your trademark within your state. While filing at the state level is less expensive, it only provides trademark protection within your state.

In South Carolina, an application for a trademark is $15.00. You must include the following in your application: (1) name of applicant; (2) applicant’s principal place of business address; (3) any South Carolina business addresses; (4) type of business formation; (5) description of the trademark; (6) a list of the goods or services with which the mark will be used; (7) mode or manner in which the mark will be used; (8) the class(es) in which the goods/services fall in; (9) date of first use; and (10) three specimens of the mark. Retaining an attorney to assist in your trademark registration will help you understand the process and streamline your application.

Copyright Applications

A copyright is “a form of protection grounded in the U.S. Constitution and granted by law for original works of authorship fixed in a tangible medium of expression. Copyright covers both published and unpublished works.” Copyright is used to protect intellectual property including your literary, musical, dramatic, and artistic works. Registration for copyright is voluntary, however, if you seek to bring a lawsuit for infringement, you must register your work.

As today’s world becomes increasingly centered around technology, seeking copyright protection is highly encouraged. The defenses to copyright infringement is Fair Use. Fair Use is a legal doctrine that grants unlicensed use of copyrighted material under certain circumstances. Section 107 of the Copyright Act identifies certain situations that permit use of copyrighted material — such as “criticism, comment, news reporting, teaching, scholarship, and research—as examples of activities that may qualify as fair use.” However due to the ever-evolving, complex field of intellectual property law, it is advised that you seek an attorney to assist you in registering your copyright or making a claim for infringement.

Trade Secret Protection

Another subset of intellectual property includes trade secret protections. Trade secrets “consist of information and can include a formula, pattern, compilation, program, device, method, technique or process.” Specifically, in order to be entitled to trade secret protection, the secret must be (1) used in a business and (2) give an economic advantage over other competitors involved in the same type of business.

While the trade secret protection arose out of the United State’s ratification of the Agreement on Trade Related Aspects of Intellectual-property Rights, an international agreement between World Trade Organization members, trade secret claims typically are handled in state court. In 2016, Congress passed the Defend Trade Secrets Act of 2016 which created a federal civil right of action for parties to remove their action to federal court. Here in South Carolina, trade secret protections are codified in the South Carolina Code of Laws in Title 39: Trade and Commerce, Chapter 8: Trade Secrets. You might be entitled to recovery if a former employee or competitor misappropriated your trade secret and obtained your trade secret improperly.

Buy-Sell Agreements

A buy-sell agreement is a contract between the co-owners or board of directors that governs in the event that a co-owner of board of director member dies, leaves the organization, or is forced to leave the organization.Buy-sell agreements are also referred to as “buyout agreements.” Buy-sell agreements can be tailored to control who can buy a departing owner’s share or seat of the business and how the succession plan is carried out. Most situations that trigger the execution of a buy- sell agreement are death, disability, retirement, divorce, bankruptcy, and/or sale of the company. Having a buy-sell agreement mitigates conflict and dispute during turbulent times and provides stability and consistency for shareholders and board members.

Vendor Contracts

A vendor contract is a contract between you and your vendor that details the roles and responsibilities of the contracted goods or services. Additionally, vendor contracts typically outline the fees associated with the goods or services. Vendor contracts should address proprietary and confidential information, termination and remedies, and disclaimers and indemnifications. These contracts are multifaceted and should be personalized to your company’s characteristics. Our firm here in Charleston, S.C. is more than equipped to draft a vendor contract specific to your organization that will provide clarity and understanding to your organization and future customers.

Independent Contractor Agreements

Independent contractor agreements are legally binding contracts between clients and contractors, typically for the performance of a specialized set of services. Independent contractors are also referred to as “1099 workers.” The contract will detail the set of services agreed upon and will identify costs and payment for the services. One of the most important reasons for an independent contractor agreement is to clearly explain that the contractor is not an employee of the client. Employees are typically ensured more benefits from their employers than independent contractors. South Carolina distinguishes an independent contractor from an employee through a four part balancing test: (1) direct evidence of the right or exercise of control; (2) furnishing of equipment; (3) the method of payment; and (4) the right to fire. A clear independent contractor agreement that identifies the specific roles of the contractor along with a distinct payment plan can protect your organization from future liability.

Employment Agreements

An employment agreement is a binding contract between employers and their employees. Additionally, it can be an agreement between an employee and labor union. Employment agreements detail salary or wages, the worker’s schedule, duration of employment, and general responsibilities of the employee. While employee agreements can be implied from promises from interviews, an employee agreement solidifies one’s employment and prevents firing of an employee unexpectedly. South Carolina is deemed an “at-will employment state” which means that an employer may fire or an employee may quit their job without notice or reason. To avoid this unexpected situation, an employee contract can prevent the uncertainty of working at-will.

Noncompete Agreements

A noncompete agreement is a contract between a business employee that mandates the employee will not enter into similar employment during or after with competitors. Noncompete agreements are also referred to as covenants not to compete. Noncompete agreements are based on the basic principle of respect, but they are narrowly construed and generally disfavored by the law to promote economic competition in communities. In South Carolina, in order to have a valid and enforceable noncompete agreement, it must satisfy the following five-prong test: 1) necessary for the protection of the legitimate interest of the employer; (2) reasonably limited in its operation with respect to time and place; (3) not unduly harsh and oppressive in curtailing the legitimate efforts of the employee to earn a livelihood; (4) reasonable from the standpoint of sound public policy; and (5) supported by valuable consideration. Because of the high burden to meet to enforce a noncompete agreement, it is highly advised to retain an attorney to guarantee your noncompete procedurally sound is in compliance with state laws.

Nondisclosure Agreements

Nondisclosure agreements, typically referred to as NDAs, are agreements between two or more parties to agree to keep secret certain information. Nondisclosure agreements are used in the corporate world to ensure contractors and potential investors do not divulge company secrets after being on the work site or being introduced to sensitive company information. NDAs outline confidential information that is off limits to be shared. Most NDAs should include a time period of how long one or more parties must keep information secret. In South Carolina, the law typically will enforce a nondislcosure agreement unless it impedes on economic freedom and seeks to limit competition in a community.

Nonsolicitation Agreements

Nonsolicitation agreements are similar to noncompete agreements in the fact they limit former employees from soliciting to the company’s clients directly. Essentially, nonsolicitation agreements keep former employees from stealing customers from under their former employer. Nonsolicitation agreements should address confidential information that is to not be shared in future employment; this normally includes client lists and certain business secrets. Non Solicitation agreements are normally agreements between companies and contractors or between contractors and subcontractors.

Terms of Employment

Terms of employment is an employment agreement that explains the responsibilities and benefits of a job. Terms of employment should explain work hours, wages/salary, vacation and sick days, and other associated benefits of employment. While you might have a valid verbal contract with an employee, it is highly recommended to have an expressed agreement between the employer and employee. Typically, terms of employment require notice and/or reason for termination of employment, and “a person hired under an employment contract for a definite term may not be discharged before the completion of the term without just cause.”

Without an expressed employment contract, an employee might considered themselves an employee at-will, which allows them to quit without notice or reason, thus leaving your business rushing to re-hire. Terms of employment streamline the hiring process, clearly set expectations, and provide stability for your business.

Terms of Use and Privacy Policies

Terms of use and privacy policies are contracts between businesses and clients that address privacy concerns. Terms of use are legally binding contracts that alert clients of arbitration clauses, modification of clauses procedures, and an assortment of other terms that are typically beneficial to the company. Without the client’s acceptance of the terms, the client may not enter the website or use the services the company offers. Alternatively, privacy policies exist to protect your client’s privacy information. Privacy policies should detail how companies are allowed to use, store, collect, and sell user data and information. In an increasingly technological world, it is important to include terms of use and privacy policies on your organization’s website to notify all parties of legal options, data collection, and privacy expectations.

Employment Handbooks

Employment handbooks are the basis of explaining the roles and responsibilities of employees and how the business operates. An employment handbook should include the company’s history, mission, vision and goals along with company policies and human resources information. The employment handbook should be used as a reference manual for procedures related to vacation days, calling in sick, maternity leave, and other company benefits. In South Carolina, an employment handbook does create a legally binding contract when: (1) the handbook provision and procedure in question apply to the employee, (2) the handbook sets out procedures binding on the employer, and (3) the handbook does not contain a conspicuous and appropriate disclaimer. Our Charleston firm is equipped to provide your organization with a comprehensive and thorough employment handbook!

Employment Policy Drafting

Some organizations might already have solid employment handbooks but are just seeking revisions on certain policies. Our firm is equipped to revise sections of your employment handbook to match your requests. If your organization is seeking to develop new company policies, we can walk you through the policy content process and advise steps for successful implementation.. Clear, well-written employment policies are the cornerstones of companies as you should expect your employees to refer to company policy during times of uncertainty. Additionally, successfully communicating the new policies with your employees ensures a smooth transition and implementation process. Companies should provide employees with relevant background information to explain why these procedures are being implemented, and employers should incorporate open communication that will give the employees an opportunity to ask questions about the new policy.

Wage and Hour Compliance

Employers have an obligation to pay employees according to the terms of their employment. When employers withhold money, they could face stiff recourse. South Carolina has strict rules governing wage and hour compliance. Call us to review your options. If you are a business owner, let us help you devise a plan to make sure you never run afoul of statutory regulations.

Hiring and Firing

Hiring good employees and firing bad ones can be tricky. South Carolina generally is an at will employment state, meaning an employer can fire an employee for any reason – except an illegal reason. There are certain protected class. Employers and employees should understand the rules and regulations governing hiring and firing. With the right strategy and information, employers are better able to respect their employees while protecting the business.

Discrimination Training

Employment and Manager Training

Employment Audits

If you are a business without a human resources department, let the lawyers at Henderson & Henderson provide the support you need. Employee issues, files, hiring, firing, and maintaining compliance with federal and state laws all require specific information to ensure your company remains compliant. We provide plans to perform a comprehensive review of your company’s hiring and firing procedures, employee files, and regulatory guidelines to make sure you understand what you need to know.

Contract Disputes

If you are in business long enough, contract disputes arise. When one or both parties

Severance Agreements

Employee Disputes

Employee Contracts