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    The Greater Williamsburg area is an exciting place to live and work, especially because of the large number of entrepreneurs who have built businesses from the ground up. These entrepreneurs have taken their passion and made it their profession. Many of us want to take that step. Before you begin, you need to think of the type of business entity you want to form. Our attorneys have extensive business experience, from small one-person companies to publicly traded major corporations. Our attorneys are among the leaders in Virginia in the representation of Common Interest Communities. These communities are generally referred to as "homeowners associations," or "HOAs," and "condominium associations." In the greater Williamsburg area alone, we provide legal assistance to nearly 100 associations. Our attorneys have successfully prosecuted and defended a wide array of civil disputes involving community association covenant enforcement, commercial transactions, construction disputes, contracts, real estate matters, boundary line and easement disputes, employment matters, antitrust litigation, copyright violations, administrative proceedings, and estate issues. Real Estate law encompasses a wide variety of matters, and our attorneys have vast experience to assist you. Whether you need assistance with a commercial or residential closing, or you have questions relating to residential or commercial leasing, we provide experienced advice and counsel to our clients. Zoning law can be a complicated maze of statutes and ordinances. We have ample experience in successful applications for rezoning, variance, and special use permit requests. Finally, commercial and residential construction provide special challenges with respect to financing issues and the construction process. We serve as counsel to various financial institutions.

Preserve your friendships when borrowing or lending with friends or family – Document your transactions

May 25, 2023 on 3:46 pm | In Business Law, Business Planning, General Interest | Comments Off on Preserve your friendships when borrowing or lending with friends or family – Document your transactions

Many small businesses rely upon loans from friends and family for startup funds, for business expansions, or to support existing operations. Many times, these loans are made upon an oral agreement. As we have written previously, although oral agreements can be enforceable, without a writing, the terms of the agreements can be difficult to prove. In this blog post, we will describe other problems with informal lending transactions between family and friends.

contract, borrow money

In a study entitled “Lenders’ Blind Trust and Borrowers’ Blind Spots: A Descriptive Investigation of Personal Loans,” researchers outlined many of the difficulties of maintaining a lender-borrower relationship  between friends and family. In many “informal” lending relationships, the borrowers and the lenders remember the transactions differently. This “self-serving bias” can lead to problems. For example, borrowers may believe that the “loan” was a “gift,” or although agreeing that the transaction was a “loan,” may believe they paid off the loan. On the other hand, the lenders may feel angry when the “loan” is not repaid, especially when the borrower never raises the issue of repayment.

The study documented these differences between borrowers and lenders:

 Many borrowers thought the idea for the loan originated with the lender, not themselves, although the lenders thought otherwise;

 Borrowers reported far fewer delinquent loans than lenders;

 Borrowers were fairly confident they would eventually repay the loan, but lenders thought even one missed payment probably meant the loan would never be paid off;

 Delinquent borrowers “are much more likely to report feeling guilty, and also strangely, relieved and happy. Lenders associated with delinquent loans, in contrast, are much more likely to report feeling angry.”

Even though banks are flush with cash to lend, you may not qualify for a loan, or the bank’s terms may be too onerous. Consequently, family and friends are natural sources of funds for startup funds or for operating capital. However, as the proverb says,”Before borrowing money from a friend, decide which you need most.” Therefore, if you must borrow from friends or family, it is a small price to pay to perserve your personal relationships to have your business attorney draft the appropriate loan documents, including a promissory note, so that everybody knows the expectations of the transaction. Taking this step at a relatively small price can save your friendships.

Tarley Robinson, PLC,  Williamsburg, VA

Attorneys and Counsellors at Law

 

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Should I incorporate my business?

May 24, 2023 on 2:02 am | In Business Planning, Merger & Acquisition, Neal J. Robinson | No Comments

Frequently, budding entrepreneurs merely evolve into business without giving it the upfront thought the transition deserves.  They become what are usually known as “sole proprietors” operating “sole proprietorships,” or one-man/woman businesses.

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What does it mean to be on the Board of Directors of your HOA? Fiduciary Duties (Part 1 of a series)

May 20, 2023 on 9:30 pm | In Business Planning, Common Interest Community, HOA, Merger & Acquisition, Real Estate Strategies, Susan B. Tarley | Comments Off on What does it mean to be on the Board of Directors of your HOA? Fiduciary Duties (Part 1 of a series)

Board members are told that they have fiduciary duties to the community association, but what does that really mean?  Fiduciary duties arise because the members of the association entrust a board member to act in the best interest of the association when handling the association’s business.

There are three components that are important to understand fiduciary duty.  First, the Virginia Code, at § 13.1-870, imposes on directors a requirement that a director exercise her duties in good faith and in the best interest of the association.  This requirement is the so-called “business judgment” rule. Second, Virginia case law imposes duty of care that requires a board member to act as a reasonable person would under similar circumstances.  Third, Virginia case law imposes a duty of loyalty that requires a board member to put the association before any personal interest.  These last two duties are referred to as “common law” duties. Continue reading “What does it mean to be on the Board of Directors of your HOA? Fiduciary Duties (Part 1 of a series)”

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Fight over beer-pong game covered by insurance?

May 16, 2023 on 4:03 pm | In John Tarley, Real Estate Strategies, State & Federal Litigation | No Comments

It’s an unfortunate fact of life that you may get involved in a lawsuit. If you are at fault in an automobile accident, your auto insurance provides protection. For other types of cases, your homeowners insurance policy can protect you.

Recently our litigation lawyers counseled clients who had been sued. We routinely ask to review their insurance policies. As it turned out, this occurrence was covered by their homeowners policy, saving them tens of thousands of dollars in attorneys’ fees.

This insurance coverage issue was highlighted in a recent Virginia Supreme Court case, Copp v. Nationwide Mutual Insurance Co. In that case, a Virginia Tech student was sued for his actions in a beer-pong game gone bad. His parents thought the costs for his attorneys should be covered by their homeowners policy or their umbrella policy, but Nationwide Mutual declined. On appeal, the Virginia Supreme Court held that because the student alleged he was “trying to protect person or property” when he caused bodily injury, “Nationwide has the duty under its umbrella policy to defend.”

You pay for your insurance policy, make sure that you use the coverage you paid for.

Tarley Robinson, PLC, Attorneys and Counsellors at Law

Williamsburg, Virginia

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How is starting a business like getting married?

May 9, 2023 on 7:03 am | In Business Planning, Merger & Acquisition, Neal J. Robinson | Comments Off on How is starting a business like getting married?

I have often been struck by how much business counseling and marriage counseling can be alike.  “He said he was really good at marketing and was going to handle all the sales.  We haven’t seen a worthwhile sale in months.  All he does is drive around, I GUESS making sales calls, but mostly just spending money.”  “She said she was going to keep the books and handle the personnel issues.  I didn’t know that meant a row of shoe-boxes full of receipts and employee turnover at seventy percent!  This place is a disaster!”  “Turnover is at seventy percent because we don’t have enough sales to keep anyone employed.  If you did your job, then maybe I could do mine.”

Williamsburg Virginia Business Lawyers

Starting a Business

He said, she said.  And so it goes.  It is estimated that fifty-five percent of all first marriages fail and approximately 56% of new businesses fail within four years.  Here are some of the reasons most often given for start-up business failures.

 

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What Should You Expect From Your Attorney?

May 8, 2023 on 6:22 pm | In Business Planning, General Interest, HOA, John Tarley, Merger & Acquisition, Real Estate Strategies, State & Federal Litigation | No Comments

I read a recent article in the ABA Journal that differentiated between the teaching of “issue spotting” versus “problem solving” in law schools. This article strikes at the core of the services we provide as attorneys. We believe firmly that although it is our responsibility to help identify potential issues that you may face, our legal advice is fully realized when we help you solve your problems.

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General Partnerships, The Way To Go . . . Financially Under

May 7, 2023 on 5:17 pm | In Business Planning, Merger & Acquisition, Neal J. Robinson | Comments Off on General Partnerships, The Way To Go . . . Financially Under

 

Though the majority of businesses in the United States are sole proprietorships, those of you who read an earlier post know that I recommend, for a myriad of good reasons, that an entity of some kind be placed between a person doing business and the rest of the world. Find an experienced business attorney to help establish your business entity.

In this post, I address briefly the general partnership form of business entity, the only form I consider more dangerous to the financial health of an individual than the sole proprietorship.  Why, you ask?  Because with the sole proprietorship, the sole proprietor is personally liable for the acts of the sole proprietor, the business and the business employees.  In the general partnership, the partners are personally liable for the acts of the business, the employees and each other.  What partners do can be fairly unpredictable, like contracting to purchase or lease things that cannot possibly be paid for out of the profits of the business, or like contracting to do that which cannot possibly be done profitably.

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Can an advisor be held liable for the false statements in a prospectus made by another?

May 6, 2023 on 4:03 am | In Business Planning, Contributors, General Interest, Merger & Acquisition, Neal J. Robinson, State & Federal Litigation | No Comments
Williamsburg Virginia Business Lawyers

United States Supreme Court

Previously we blogged about a pending case before the Supreme Court that had the possibility to significantly increase the liability of persons for assisting in the preparation of a “prospectus.” As of June 13, 2011, the Supreme Court handed down an opinion in that case, styled as Janus Capital Group, Inc. v. First Derivative Traders, No. 09-525 (S. Ct.).

The determination of this case is relevant to accountants and business lawyers who assist in the preparation of documents for the purpose of raising money for investment. The Janus Capital Group, Inc. case presented the question of who may be deemed to have “made” an untrue statement for the purposes of Rule 10b-5, and specifically whether someone who assisted in the preparation of a prospectus could “make” a statement through such assistance. As the result of a 5-4 decision, accountants and business attorneys may breathe a little easier. Continue reading “Can an advisor be held liable for the false statements in a prospectus made by another?”

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Update for Limited Liability Companies: What happens to Membership Interest when a Member Dies?

May 3, 2023 on 5:44 am | In Business Law, Business Planning, John Tarley | No Comments

We blogged about the Virginia Supreme Court case of Ott v. Monroe. In that case, the Court ruled that when a father, in his will, assigned his majority interest in a limited liability company to his daughter, he only assigned a profit interest, not a control interest. Consequently, his daughter did not have the authority to “run” the company, absent the consent of the remaining LLC members.

In its 2013 session, the General Assembly modified the relevant LLC statutes in an attempt to overturn the Virginia Supreme Court’s decision. This blog post examines the new statute, and how it may impact your limited liability company.

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Common Interest Community Board revokes a management company’s license

April 26, 2023 on 3:08 am | In Business Planning, Common Interest Community, HOA, Merger & Acquisition, State & Federal Litigation, Susan B. Tarley | No Comments

The Common Interest Community Board (the “CICB”) revoked a management company’s license for regulatory violations.  In a case reported in the September issue of the Community Associations Institute Law Reporter (Virginia Common Interest Community Board v. Sarraga t/a Lakeside Community Management, File No. 2010-00562, June 24, 2010), the CICB revoked the license of Sarraga t/aLakeside Community Management and issued fines totaling $2,000.

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