In our latest episode, Nasir and Matt are covering the legal issues on Social Media. The average person spends most of their day on social media, whether they are scrolling for hours or publishing their own content. However, just because you publish your own content on Instagram does not equate to you owning that image. The law is a little complicated and the solutions aren't always clear. Brands that work with influencers gain a lot of attention, but all too frequently, influencers break the law by not adhering to them. Full Podcast TranscriptNASIR: All right. Welcome! We are covering social media and the law. MATT: This is not even something you would have to think about. NASIR: Do you have the right to do whatever you want? MATT: There’s potential biases. NASIR: You have influencers’ endorsements. Who owns what? MATT: Kickstarter, GoFundMe, and stuff like that. This is Legally Sound Smart Business where your hosts, Nasir Pasha and Matt Staub, cover business in the news and add their awesome legal twist. Legally Sound Smart Business is a podcast brought to you by Pasha Law PC – a law firm representing your business in California, Illinois, New York, and Texas. Here are your hosts, Nasir Pasha and Matt Staub. NASIR: All right. Welcome. We are pretty much an A to Z – or Facebook to Twitter as I like to call it – of law and social media. How are you doing, Matt? MATT: Yeah, doing well. You know, the interesting thing about this topic is I guess it’s still relatively new, but if you had a business a few decades ago, this is not even something you would have to think about – at least in this sort of context. It’s always evolving because social media is always evolving but, yeah, there are a lot of considerations for business owners with this. NASIR: And it keeps changing, so much so that we actually did an episode similar – not quite the same – on social media and the law about 2017. If you take 2021 and minus 2017, that’s how many years ago it was. MATT: Yeah, it’d be interesting. Like you said, I mean, even four years ago, I’m sure some of the things we talked about are vastly different than what we are going to talk about today – new laws, new rules. It’s something that people have to stay on top on pretty heavily. NASIR: Right. I mean, even four years ago, social media from a legal perspective, I’m not sure how much it changed, but the way we use it keeps adapting. I’m trying to think in social media what’s been really different here. I don’t think TikTok existed four years ago. Or it barely existed, right? What other mediums? There are also mediums that are no longer existing. Wasn’t there that one where you can have those 7-second videos? What was that? MATT: Vine. NASIR: Vine, yeah, that’s gone. I think it was Vine, yeah. Did Twitter buy them out or something? MATT: I’m not sure. I thought they closed down, but maybe. NASIR: Yeah, it goes back and forth. MATT: I think it was probably, if I can remember correctly, I think Facebook was more popular. Things like Instagram were probably less popular. I’m sure there are still a lot of Facebook users, but my guess is the popularity of those two flipped a little bit. It depends on the demographic too, but that’s kind of the general observation I’ve had. NASIR: Right. We also went through the Trump administration which, of course, when it came to social media, there’s been quite a bit of activity with our president tweeting almost every single day multiple times. And so, that obviously was a big kind of cultural shift, I think – the mainstreaming of social media. When I have my parents getting on Facebook and Twitter and things like that, then you know we’ve gotten to a new level. MATT: I didn’t even think about it from that context. Obviously, that was a big thing at the time. Since then, he was kicked off for a period of time. Is he back on? I haven’t paid attention. NASIR: I think he’s still off. I mean, I don’t know about every platform,

Legally Sound | Smart Business

Social Media and the Law [e315]

What is a Non-Disclosure Agreement, and when do I need one? In this episode, Nasir and Matt shares why you need to use Non-Disclosure Agreements, basic facts about NDA's, and discuss about the infamous Jenner-Woods story. Having the right Non-Disclosure Agreement in place not only protects you and your business, but it also makes the purpose of sharing the information clear. Full Podcast TranscriptNASIR: Today, we are covering nondisclosure agreements. MATT: I feel like that’s all I talk about. NASIR: What is an NDA? MATT: It can stretch pretty far. NASIR: Let’s get to the meat of an NDA. Is it really confidential? MATT: It all depends on the scenario too. NASIR: I’m telling you this in confidence. MATT: This one’s a little bit tricky. This is Legally Sound Smart Business where your hosts, Nasir Pasha and Matt Staub, cover business in the news and add their awesome legal twist. Legally Sound Smart Business is a podcast brought to you by Pasha Law PC – a law firm representing your business in California, Illinois, New York, and Texas. Here are your hosts, Nasir Pasha and Matt Staub. NASIR: All right. Welcome to our podcast! Today, we are covering nondisclosure agreements – probably the most favorite topic of all business owners. I can’t run into anyone that is in business and they don’t want to just sit down and talk about nondisclosure agreements. Don’t you agree, Matt? MATT: Yeah, I feel like that’s all I talk about with our clients – nondisclosure agreements. But, yeah, if you’re a business owner, I mean, depending on the line of work and how long you’ve been doing business, you’ve at least encountered some – possibly hundreds. NASIR: Yeah, literally. MATT: Yeah, I can’t even keep track of how many you and I have probably reviewed, but it’s at least a few hundred at a minimum. NASIR: Yeah, at minimum. Nondisclosure agreements are also known as NDAs. They’re sometimes called confidentiality agreements. Sometimes NDAs include the word “agreement” in there, but sometimes contracts have confidentiality provisions that are somewhat applicable, but this is kind of a very narrowed topic, so we are going to make it a little interesting because we’re going to talk about these extremes where NDAs go way too far. You know, especially in the media, we’ve heard this quite a bit, I think, especially in the last few years, and we’re going to talk about everything and how NDAs were being used in The White House to how celebrities use it and different aspects like that. MATT: Right. Like I was saying before, we’ve seen so many different iterations and there’s always going to be some standard terms you’ll find in any NDA but, like you said, we’ve definitely also seen instances of it going too far, and that’s going to be the focus here – those experiences that we’ve had when we’ve seen language in there that makes us kind of think twice. Obviously, we have to notify our client at that point. I think this is a little bit of an overreach. NASIR: Absolutely. Let’s start. What is an NDA? Well, Matt, let me ask you that question. What’s your definition of an NDA? MATT: Sure. Let me see how I would answer that. Like you said, it’s a nondisclosure agreement. Basically, it’s typically two parties can be more disclosing information. It could be unilateral, or it could be mutual, but basically you have at least one party – maybe two – disclosing information to the other party and they’re prevented from sharing that information with any third party that’s not part of the agreement. How did I do? NASIR: You did great. That’s probably what I would have said. As you were talking, I started to think about different components of what we were going to cover today, but let’s talk a little bit about when to use an NDA or when this is applicable. I think the most common thing in business is that the first thing you do when you’re about to enter into a potential transaction, you want to disclose certain sensitive confidential information that is not ava...

Defining NDA Boundaries: When does it go too far? [e314]

Through a five-round championship bout, Matt travels to Texas from California to determine which state is better for business. Will it be a knockout with a clear winner or will it go to the scorecards?

California v. Texas: Which is Better for Business? [e313]

Covered in this episode of Legally Sound Smart Business are some typical business mistakes blunders small businesses often make and how to avoid them. Blunder #1: Copying and pasting agreements https://www.youtube.com/watch?v=FBwoa3np9M0&t=8s It may sound like a good idea at the time, but this blunder comes with hidden pitfalls. Having an attorney draft terms that are specific to your company’s products and needs can actually save your company substantial time, money, and avoidable liability. If you choose to forego an attorney, at the least, read the terms line-by-line, to ensure that you understand everything. If there is something you don’t understand, you should not be using it. Blunder #2: Creating a brand without doing research on the name https://www.youtube.com/watch?v=T1dYrbhO5cI One of the worst things that can happen to a new business is for the owners to spend a substantial amount of time and money promoting a certain name, only to find out it’s already being used. Even if they haven't registered a trademark, someone might own the rights simply because they were using it first. At the very least, a Google search is an absolute must. A recommended search engine that does a worldwide search can be found here: https://www3.wipo.int/branddb/en/. Blunder #3: Misclassification of workforce https://www.youtube.com/watch?v=wsyPIpl3Bjc It is one of the most common blunders, yet the negative effects of misclassification can be staggering. One worker claim can trigger an audit of your entire workforce by any number of state and federal agencies. These agencies have the right to issue heavy penalties and interest on taxes and wages, liens, and even injunctions. Businesses can still be subject to crippling class-action suits with multi-million dollar consequences. Err on the side of classifying as an employee and assume the employee is non-exempt. Blunder #4: Partnership agreement not signed by all parties https://www.youtube.com/watch?v=GjSQF0AHVsY After spending time discussing the terms of your partnerships, make sure you get in writing--and do not commit blunder #1 by just copying and pasting an operating agreement found online. Blunder #5: Not documenting employee performance https://www.youtube.com/watch?v=b9ErHzEH4cg Documentation provides evidence that supports management decisions to take unfavorable action such as discipline or termination with an employee. This was discussed in our previous episode 311. Transcript: Full Podcast TranscriptNASIR: Today, we are covering blunders in the business world. We’re not just talking about a mere mistake. MATT: It’s a matter of cost and time. NASIR: To me, a blunder in business can result in substantial liability or exposure or cost or time. MATT: That’s when the target on your back gets a lot bigger. NASIR: Don’t do it. [INTRO SONG] This is Legally Sound Smart Business where your hosts Nasir Pasha and Matt Staub cover business in the news and add their awesome legal twist. Legally Sound Smart Business is a podcast brought to you by Pasha Law PC – a law firm representing your business in California, Illinois, New York, and Texas. Here are your hosts, Nasir Pasha and Matt Staub. NASIR: All right. Welcome to our podcast! Today, we are covering blunders in the business world. This is where businesses make huge mistakes – blunders if you will – that can really cost their business in more ways than one. MATT: Yeah, and I didn’t tell you about this beforehand, but I actually reached out to Bob Saget to see if we could have our own separate episode. NASIR: Bob Saget? MATT: Top blunders. NASIR: That’s bloopers! Oh. You mean, America’s Funniest Home Videos. MATT: Yeah. NASIR: Of course, a classic. MATT: I mean, to me, that’s a form of blunders, but maybe you disagree. NASIR: Well, I would say it’s just as entertaining. Maybe from our perspective, perhaps our clients or other businesses may not agree,

More Than a Mistake: Business Blunders to Avoid [312]

How you terminate an employee can make the difference between a graceful transition to avoidable negative outcomes like a dramatic exit or even a lawsuit. We gathered a panel of experts and asked them - is there a "right way" to fire an employee? We would like to thank our guests for this episode: Amr Shabaik, Civil Rights Managing Attorney with CAIR Los AngelesPatty Cuthill, Director of People & Culture with NextLevel InternetAnitra Negrete, Director of Human Resources with Leaselabs by RealPageTadessa Williams, Director of Human Resources in Houston, TX Full Podcast Transcript NASIR: Look, the other person you’re firing, they’re a human being. PATTI: Well, you’re miserable. They’re probably pretty miserable, too. NASIR: Even if you have a script, it’s going to go off-script. PATTI: You want to pull the band-aid off right away. MATT: But there is some finesse to it. It’s not like you’re a robot. NASIR: You really have to treat these people with dignity and respect. NASIR: You have every right to terminate this employee. They may be surprised at first, but not secondarily. There are a couple of things that happens when you have someone else in the room. NASIR:All right. We’re here to talk about how to fire somebody. In fact, we’re going to do something different today. We’re going to bring someone in – onto the podcast – and fire them live on national podcast… No, we’re not doing that, but we are doing something different today. Right, Matt? MATT: Yeah. You know, we obviously have our input from the perspective of attorneys, but we’re not always the ones that are terminating people. Oftentimes, with our clients, there’s people within the company that are handling the terminations, so we figured it would be best to get first-hand experience from, well, four individuals that have terminated people ranging from – what do you think? – like, five years to fifteen years. It’s going to be some valuable information for any business owner. NASIR: I think, put together, literally decades of experience – not including hours. And so, I don’t know. Let’s take a listen and introduce some of our guests. There’s four of them – three are HR professionals and one employment law attorney. Here they are! ANITRA: So, I’ve been in human resources going on now 20-plus years. AMR: I practiced employment law for the past six years before starting my current position at CAIR LA which I started sometime in late 2019. PATTI: Well, I’ve been in the HR field – human resources field – for I think over 15 years now. TADESSA: I’ve been their director for 11 years. Prior to that, I have a fairly extensive background in HR consulting, specifically working with professional employer organizations. NASIR: So, I’ll tell you, these people are across the map. What I find interesting is that basically they’re from two states, I should say – Texas and California. The Texas perspective, the California perspective, you can very easily see the difference. Luckily, you know, Matt and I – you obviously live in California, and I live in Texas. Obviously, we practice in both states – our firm – but it’s good to have that kind of dichotomy, don’t you think? MATT: Oh, yeah, definitely. As listeners will hear during the recordings we’re playing, it’s very different in terms of employee protections in California versus Texas. I guess, for those that are multi-jurisdictional, maybe they’ve encountered it but, for those contained within one of those two states – or even another state – there might be some surprising information that they’ll be hearing from these individuals. NASIR: Right. Even though they had different perspectives, I think they all had a common theme of how to approach a termination, and I think this is something that we preach quite a bit as well. It’s like, “Look, the other person you’re firing, they’re a human being.” At the same time though, they had different kind of subtle perspectives on it.

Is There a Right Way to Fire an Employee? We Ask the Experts

The COVID-19 pandemic has turned nearly every aspect of life on its head, and that certainly holds true for the business world. In this episode, Matt and Nasir explain how the early days of the pandemic felt like the Wild West and how the shifting legal playing field left a lot open to interpretation and instinct.  What were the major impacts from the evolving business situation, legislation, and healthcare changes? From telecommuting to PPP loans to force majeure clauses, what recommendations did we make to our clients as the first 8-10 months of the Coronavirus pandemic progressed? Listen to this episode as Nasir & Matt share their perspective from the 2020 Coronavirus pandemic. Full Podcast Transcript NASIR: Hey, how is it going? This is Nasir Pasha. MATT: This is Matt Staub. NASIR: Today we’re talking about everyone’s favorite subject in the workplace. That is COVID-19. I don’t know if anyone else is tired of talking about it, but we thought we’d share our legal experience and hopefully switch things up just a little bit for everyone here. MATT: Right, and obviously, it’s been the major topic of 2020 just in general. For particularly in the employment sense too, for anyone that was going to an office every day, I would think, what, at least 90% of those people have been working from home at least in some capacity. Some still might be. From the employer side, there’s been a lot of challenges they’ve had to navigate since – what would that be, since March, essentially? We’re going to get into some of those today. What’s transpired over that time and some personal – not personal, some anecdotes from some of our clients on how they’ve navigated those seas. NASIR: Yeah, we want to share our experience. When this first started out and I remember – it must’ve been February or early March when I remember I could not get on a phone call or a meeting where the first 10 minutes, 15 minutes was just occupied by COVID. The thing is, in retrospect, it’s almost kind of funny. Everyone would be making jokes. Okay, what does is this coronavirus? Then they would talk about the Corona beer. They would talk about elbow bumping. They would talk about, oh, let’s not shake hands and this and that. It was truly a joke. I mean, it was something that, oh, but I heard this. I heard that. It didn’t take long. That was probably for a few days or maybe a week where – then not short after that all of a sudden it became a reality. Now people are going and staying home. Now you have the – you have these government orders nationwide, state, local, county that now are saying you cannot go to work. You have to stay home because this thing is spreading. Again, I don’t need to tell anyone because everyone has experienced it. It was a very interesting time in particular for us as lawyers, as business lawyers because now we’re receiving a flood of questions, and that’s really what we’re here to talk about today. MATT: Yeah, there was a point when everybody seemed to not know a lot of things. Like you said, we had our clients reaching out to us. We were diligently working to research on our own then as best as we could. Again, not even all the answers were there, and there still are a lot of unknowns. At certain times, we had to make assumptions and what we think was going to happen and, obviously, convey that to the client. It was a pretty wild time looking back. We just wanted to speak on some of the key things that popped up over that time and where we were at then and where we’re at now. NASIR: Matt, I’m curious what you think about this because during that time – and it’s not that it’s over, but from our perspective, we’ve dealt with all the major issues. I did get some kind of personal, professional satisfaction from that period of time because we were literally practicing some level of frontier law. I have friends in the medical industry, and they talked about how they were treating coronavirus at that time.

The New Frontier: Navigating Business Law During a Pandemic [310]

After plenty of ups and downs, our buyer has finally closed on the purchase of their business. While we're marking this down in the 'wins' column, it never hurts to review the game tape. In this final episode, our hosts, Matt Staub and Nasir Pasha, return to the deal almost a year later to reflect on each step of the process. What if you're not in the market for an urgent care in California? How does this purchase process relate to other business deals Matt and Nasir have seen? Will the lessons we learned here carry-forward in a post-Covid world? Tune in to this final episode for answers to these questions and more. Full Podcast Transcript NASIR: Welcome to Legally Sound Smart Business. This is our last episode of Behind the Buy where we cover a business transaction from start to finish, and now we're beyond the finish line in our last episode where we're going to reflect and really give some insight on this entire transaction. My name is Nasir Pasha. NASIR: And I'm Matt Staub. NASIR: This episode, I've actually been looking forward to for a while. We've been releasing our series for months now, and we're actually recording this -- I think it's almost been a year since we actually recorded originally this series. Right, Matt? NASIR: Yeah, I think a little under I guess, but by the time this episode comes out, it'll probably be just under a year. NASIR: Yeah, just under a year and of course, 2020, for those of you that are listening from the future hopefully, we're still around. It's been a crazy year but buying a business in -- I think we're going to talk about this, but pre-Covid and post-Covid is a completely different story, but I think what's nice about this, we can kind of look at that in this lens. It's like how this may have been different after Covid, right? NASIR: Yeah, undoubtedly, obviously, it would be a much different transaction if it would have been after or even during, but we'll touch on that. It's just one of the things that can arise in the transaction of buying a business. NASIR: In our series obviously, you guys listen to it or maybe you're catching up still, but our client buyer was buying a business out in California, an urgent care business. And of course, not everyone's buying urgent care in California, that's a pretty specific transaction, but what was really neat about this transaction, not only the fact that you were able to kind of go through from the beginning to end -- because let's face it, not all transactions go through. This one did and I think we would consider this a success, and it did close, but there were so many different aspects at every episode at every step of the transaction that you can kind of grab from and relate to in other transactions. Matt and I often talked about how when we're even listening to the episodes ourselves, I know Matt obsesses over the podcast, listens to it every night. I'm not wanting to do that, but when we did talk about it, we did reflect upon how this related to other clients and other transactions that we've been in and we thought that this would be a good opportunity to kind of share those stories as well. NASIR: Sure. It's like you said, this is an example of a transaction that obviously, there were bumps along the road, but it ended up with the right result for the client, but there's plenty of instances where there are these different hiccups and bumps and that isn't the case and the deal blows up. We're just going to go through the life cycle of this transaction and touch on some examples where it hasn't been successful. NASIR: And that first step is that letter of intent. When you're acquiring a business, I wouldn't say this is the case in all cases, but for those that have gone through many series of acquisitions and so forth, everyone understands that you get a lot of prospects, but very rarely, maybe 1 out of 10 or 1 out of 20 deals actually goes, the first step of actually signing something and getting an offer,

Wrap Up | Behind the Buy [8/8] [309]

The ink is drying on the signature line and things are looking great for our buyer. After so much hard work, the finish line is in sight and the cheering within ear shot.   Though the landlord is still serving friction, things seem safe to move forward and for now, our buyer will be keeping on the entire team. With the closing just around the bend, will all of our efforts and close attention to detail finally pay off? They say dot your I's and cross your T's, lets hope there isn't one more wrench looking for an engine. Full Podcast Transcript NASIR: All right, welcome to episode 7 of our Behind the Buy series of Legally Sound Smart Business. My name is Nasir Pasha. MATT: And I'm Matt Staub. NASIR: And this is closing day. Probably the most not exciting part of buying a business or this process, at least from an attorney's perspective because even though there's a lot in this episode, it's kind of underwhelming because if we did our jobs correctly, it's a non-event. MATT: Right, honestly, if it is exciting, then that means something bad has happened. When everything's closed, you want to make sure that there's no fireworks that day because we've seen it before, something could happen at the last minute. There's a contingency that needs to be satisfied still and there's a question of that again, if something's blowing up that day, it's not good. NASIR: Correct, and I do enjoy that kind of last-minute shuffle and trying to figure things out, usually like you said, there's problems, there's other people involved trying to figure that out, but in this case, it turned out well. I don't think I'm giving too much away because the transaction itself, even though there's been a few bumps in the road has been relatively smooth and I think that is hopefully some credence to our ability to make it smooth even with the bumps in the road, but I think also the main component was the time. This wasn't a close that we had to do in a week. I think this was a course of a couple months or so, and that gives us quite a bit of leeway to actually deal with some of these issues. MATT: Sure, I mean that certainly helps, but like you said too, on our end, it's problem-solving so the listeners have heard the various problems that arose throughout the escrow period and it's really looking at those face on, addressing them and then strategizing to what's the best way to approach it because oftentimes nothing's going to be perfect if a problem arises, but it's really trying to mitigate the risk and find something that's going to be as seamless as possible. Preferably for our client, but ideally, I guess for both just to keep things going. NASIR: Right, so we're going to play this call. It's actually pretty short, but there's actually quite a bit in there, so listen carefully because we're going to break it down in detail especially what's going on before and after this particular call is going to be a big focus for us, so let's listen in. MATT: All right. MATT: Hello. NASIR: Happy closing day. BUYER: Yes, very glad to be through this and finally get started on the actual business. NASIR: We thought we'd just have a quick call on what you can expect today, and also catch you up on our recording a little. I know we've been talking about a lot of this stuff offline through email, but let me review it again. Typically, closings are not much of an event as you may think, but they actually are typical -- they used to sit in an office and exchange signatures and kind of a formality or some formalness to it, but that's rarely done now in our experience. In fact, just yesterday, you gave us the signature pages which today, we'll actually exchange those signatures with the seller. Matt, do you mind going over the closing package just to make sure she knows what's in there? MATT: Yeah, sure. The main thing is finalizing the exhibits of the listed assets. We're not excluding any assets of business except accounts receivable and cash on hand.

Is it all over?| Behind the Buy [7/8] [308]

Though things are coming along well, the journey would not be interesting if it was purely smooth sailing. After our buyer opens escrow, they are forced to push the closing date back when suddenly a letter from an attorney was received claiming the business, we are buying has a trade mark on the name!  Now it’s time to for our buyer to either back off or buck up and fight for our Trademark rights! Full Podcast Transcript NASIR: Welcome to Legally Sound Smart Business. This is our sixth episode of Behind the Buy, in our series where we uncover the business transaction of buying a business and you get to hear the inside scoop of our calls with our client. My name is Nasir Pasha. MATT: And I'm Matt Staub. NASIR: This episode, there's just so much to set up here. It's pretty dense, but I think we're gonna try to do it here. In this episode, there's two phone calls. At this point, if you guys recall in episode 5, the buyer and seller have gone through some periods of due diligence, there were some hiccups there with the lease and the seller made a dumb mistake by telling the employees prematurely. But we did get past that and we actually ended up signing an asset purchase agreement after it was drafted. Luckily, as soon as you sign the asset purchase agreement, it's not like the transactions over, you still have another period of due diligence, and that's a little bit more intense than the LOI due diligence period. That's about where we are right now. MATT: If you recall from the previous episode, we had, I think it was three different contingencies in place, so like you said, just because the agreement signed doesn't mean the transaction's done and the sellers getting paid at whatever the closing date is. What's funny about this episode is if we look back when we had that issue with all the employees finding out, that seems like it's really a drop in the bucket compared to this. This is like a grab bag of issues that came up. Listen to the call, it's just one after the other without even any transition to the next one just because there were so many things on our mind that I think just needed to get them all out there and discuss with us. NASIR: If I recall, after that happened in the last episode and the call before, you could tell that the seller is just gonna be fun to work with to say the least. There's two calls. The first call is really short. This is basically talking about the escrow period, but the second call, I just want to set it up a little bit because it's actually set very close either a week or so before closing. Our client actually sent us an email, it was late in the night or something like that and I remember, it was relatively urgent and so Matt and I talked first and then we got on the call with our client to discuss. I just wanted to set that up a little bit. Of course, like every episode, we have some defined words that we need to go over to make sure that it doesn't go over anyone's heads. I guess that's a little insulting to say, I probably shouldn't say that, or just a reminder of certain words that maybe some people may need a reminder of. MATT: Well yeah, it's not even just the listener, I think attorneys too with this first one indemnification clause. I'm not even sure there's a full understanding of that, but it's a very common provision that's -- I don't wanna say every contact, but most contracts, but essentially what it is is you have two parties, the indemnifying party and the indemnified party, and it's basically if there's a third-party claim made against the indemnified party, the other party then would -- I probably should not describe it like this because I'm just saying indemnify over and over. NASIR: It sounds like a big party, but it sounds great though. MATT: Long and the short, there's a third-party claim against one party, and then the other party to the transaction, in this case, would then have to indemnify that other party, meaning they'd have to basically become respon...

Fight for Your [Trademark] Rights | Behind the Buy [6/8] [307]

With frustration at an all-time high and professionalism at an all-time low, our friend the Buyer has “had it” with the Seller and quite frankly their lack of knowledge. At present our Buyer is rightfully concerned that the latest misstep from our loose-lipped Seller will threaten not only the entire operation of the businesses but very well may threaten this deal. After so much solid leg work has been done by our team, our guys will have to reach up their sleeves for a good plan, potential solution and hopefully a little luck.  But the old adage keeps popping up that nothing is guaranteed in business. Hate to say it but “they let it slip”.… Full Podcast Transcript NASIR: Alright, this is our fifth episode of Behind the Buy where we are covering a transaction from beginning to end with our client buyer, My name is Nasir Pasha. MATT: And I'm Matt Staub. NASIR: I think this was interesting because our buyer was jarred on this one. To this point, the ups and downs were pretty -- I should say palatable by our client but this one, you could tell even on this phone call, she was a little annoyed. MATT: Yeah and some of the previous calls, there's been some minor things that have come up and maybe a little bit more than minor. She's been relatively fine, but she was definitely concerned about this one and rightfully so, a possible thing that could just kind of blow up everything. I would say this is the most material issue we've come across even more so than the whole lease situation. NASIR: Righ. Without giving anything away because we're gonna play the call here in a minute, I should set up the premise. We've signed the LOI, we're in this due diligence period and we're exchanging documents. We're still basically finishing up and drafting the asset purchase agreement, which is by the way one of her vocab words again. We use that term asset purchase agreement, APA, that's the actual agreement, the purchase agreement that we're utilizing and it differentiates between just a regular equity purchase or agreement where we're actually buying the equity in the business, in this case, an asset purchase for buying the assets. In this process of buying the business, we represent the buyer and the buyer wants to make sure that the business continues as normal. Once the business is purchased, we want to continue with the success that it's had in the past. So anything that disrupts that is a risk to the transaction. From the sellers perspective, they don't want to risk any kind of disruption in business, and from the buyers perspective, once they buy the business, they don't want it all of a sudden to fall apart. I guess that's the kind of cue up of the call is something happens on this call that risks that from happening. MATT: You're exactly right, from looking at both sides of the coin, the seller doesn't want anything to happen because it could blow up the whole deal, there's contingencies in place and if those aren't met, the buyer might back out and then on the buyers side of things, if they go through with the transaction -- There's always going to be issues to deal with at the beginning once the transaction is finalized, but they don't want anything major that's going to disrupt the entire operations and possibly things from the get-go. NASIR: Right and so hopefully, we come up with a solution here. This is a short call, so let's have it. I think we just have one or two more vocab words to go over and we'll play it. The first is UCC lien. I feel like we've covered that before but just in case, again when there is some kind of lender involved or some third-party financing and someone wants to make sure that their collateral is protected, they could actually file a lien with the respective state and that's called a UCC lien. UCC meaning Uniform Commercial Code. You don't need to know too much about that other than it's if you have a UCC lien on the business and you're buying a business,

They Let It Slip | Behind the Buy [5/8] [306]

As we go deeper into the buying process, we start to uncover more challenges from our seller and encounter some of the wrenches they are tossing our way. When we last left off in episode three our team was knee deep in due diligence for our buyer, had already penned and signed the Letter of Intent (LOI) and was grappling with this mysterious business broker. As our team irons out the details on a pivotal deal changing lease for our buyer, the seller’s broker friend starts to stir the pot and our attorneys reach for their running shoes as our team gets ready to jump our first big hurdle. Even though everyone’s eyes roll, worry not, our attorneys have dealt with his type before, but with every case being different will the other obstacles on the horizon be just too much for our buyer? Listen to episode 4 of the Behind the Buy series. Full Podcast Transcript NASIR: Welcome. My name is Nasir Pasha. MATT: And I'm Matt Staub. NASIR: This is our fourth episode on Behind the Buy series where we're walking through the process of buying a business with our client and this one is a doozy. I think this is our first real obstacle and this is also during our due diligence period right after we signed the letter of intent but before the purchase agreement's kind of finalized. MATT: But this is realistic and an actual transaction, too. Now we've kind of gotten to the substance and the meat of this transaction. Like you said, there's a lot of inter-working pieces and components that are going on. So I think this one's a great listen if someone really wants to understand what's entailed in the purchase of a business. NASIR: Right. And some of these things, you just can't predict. But in a lot of ways, it's totally predictable. That is you're going to get things that you're not going to expect. There are some vocabulary words we use here. We want to make sure we define beforehand. First one is earnest money and third-party escrow. In this call, we start talking about how we're going to be depositing a more sizable deposit with a third party escrow as an earnest money. And again, this is not dissimilar from buying a house when you're buying a business. It's kind of the same way. You're actually depositing cash usually with a third party. They're called the escrow agent or the escrow officer, and they retain it in their bank account in trust. They will release those funds upon instruction from both the buyer and seller or as otherwise directed in the actual purchase agreement. MATT: The next couple of terms we have, we have asset purchase and then we have stock purchase or also equity purchase kind of used interchangeably. So I think we've talked about this in the previous episodes, but an asset purchase in this context would be a situation where you're kind of picking and choosing the items you want to buy from the seller kind of an a la carte way of looking at it. With a stock equity purchase, you're buying everything. That's what we're talking about when we say asset purchase or versus a stock or equity purchase. NASIR: The next couple of terms are healthcare-related. Our buyer is buying an urgent care. We do have to cover some health industry-specific terms just to make sure that everything is communicated properly. There's just two here. One is CLIA waived testing. That just refers to the urgent care where they have to be certified by CLIA which certain labs have to do that. We find out that, okay, this is not a lab that requires that kind of CLIA license. The reason that's important is because whether or not we need to transfer that license or get a new license when you're buying the business. The second item is also kind of related to that in the sense we had to see whether we need to transfer any in-network provider agreements as well. Most health care facilities are in-network, meaning they have some kind of contract with an insurance payer to be reimbursed at a certain rate.

Mo’ Investigation Mo’ Problems | Behind the Buy [4/8] [305]

One word--interloper! When a new mysterious broker enters the transaction and starts to kick up dust, Nasir and Matt take the reins. The seller signed off on the letter of intent (see episode 2), yet this “business broker” serves only friction and challenges by refusing to send financials, whilst demanding more of a firm commitment from the buyer. Still, just like dealing with any drama causing personality, the guys and our buyer do our best to approach it with a clear mind and cold hard facts. However, with now more than two in this tango, will our guys be able lead us through the muddy waters of this “broker or joker”? Full Podcast Transcript NASIR: Welcome to our third episode of Behind the Buy. This is where we're going to encounter a third-party interloper. Usually, they're not, it's the broker episode, right, Matt? MATT: Yeah, probably our first and only introduction to another party into this series. NASIR: I have to say, this is the first time that our listeners are hearing -- We could have easily predicted this, but this is the first time where our listeners hear a transaction starts to just take a little bit of a different direction than what's expected. Again, that's common, and I think we mentioned at the beginning of our series or last episode that you kind of have to walk into these transactions expecting the unexpected to be really agile, otherwise, you're going to stress yourself out and it's also going to get in the way of getting a deal done. MATT: I kind of look at it in the sense of any big event, big transaction, there's going to be things that are going to pop up that you just have to be prepared for, or prepare as much as you can. Not to throw it back to our wedding analogy, but I look at it as a wedding. You know something's going to happen leading up to it or on the day of too and you just have to be prepared to fix whatever needs to be fixed and move along and make sure that you hit the finish line. NASIR: We're going to play the call here in a second. There's a couple of calls in this one. Our buyer gives Matt a call without me. Luckily, he recorded that call. MATT: That's my favorite call. NASIR: We do have a vocab review. A couple words that we used in the last episode including Letter of Intent, LOI, I think that's pretty self-explanatory but a couple of new ones. The first being escrow. What's escrow, Matt? MATT: Escrow can mean a variety of things, I suppose. But in this context, there's going to be money that's held for a downpayment in this transaction and it's held in this escrow until we close. NASIR: It's usually a third-party, usually unrelated to the transaction. We've had experiences where they want us as attorneys, whether it's buyer's attorney or seller's attorney to act as escrow. There are circumstances where that may be appropriate. Typically, we don't do that because there are things that can happen during escrow and that alleviates any kind of conflict of interest. You want your attorneys to be able to represent you throughout the transaction. The second vocab word again is a repeat from last time which is no-shop provision. This actually comes into play in this call you'll see because the no-shop provision is a provision that we actually put in the letter of intent where the parties agree that the seller is not going to go out there and "shop around" or go to other potential buyers for their business. That's going to come up in this call, so let's take a listen. Did I miss anything, Matt? MATT: No, it was a pretty normal conversation, these 2 calls, so I think we're good. NASIR: Good, okay. Let's listen in. MATT: Hello? BUYER: Hey, Matt. How are you? MATT: Hey, pretty good, just catching up on some of your emails, in fact. BUYER: Okay, I thought we could just talk it out. I thought that it would be easier. MATT: Yeah, definitely. We're recording, by the way. BUYER: Okay, got it. I just got off the phone with the seller.

Broker or Joker | Behind the Buy [304]

Just as most stories and deals start out, everyone is optimistic, idealistic and full of hope for clear skies. It's a perfect outlook with a perfect setup for the ups and downs yet to come. Peek further behind the curtain and into the first steps of buying a business: the letter of intent. After the first episode, you already have an idea and context of our buyer's situation.  Listen to the call, as we walk through the important points and considerations when drafting our buyer's letter of intent, that happens to include a no-shop provision.   Full Podcast Transcript NASIR: Welcome to Legally Sound Smart Business, this is our second episode of Behind the Buy, our series where we take a look at the transaction of buying a business with our client, you get to listen in on our phone calls. My name is Nasir Pasha. MATT: And I'm Matt Staub. NASIR: This is our first real episode, I think our first episode was just kind of an introduction of our series, but this is where we really get to the meat. We're going to play our first phone call. At this stage, we're just setting things up. We're talking about the actual initial transaction of negotiating the business terms through what is called a letter of intent. MATT: It's just some table setting if you will, the document that starts the whole transaction and discussing the terms that are in there, what should we include, what shouldn't we include. Just prepping our client and getting this whole thing started. NASIR: Even though I think this is a pretty straightforward part of the transaction, there's a lot of important information here when a buyer's looking to purchase a business, the different options they have on how they make the offer and how they structure it. There is a lot of discussion to be had before things are put in writing. This is a critical step, but this also really sets up everything that's going to be coming, the twists and turns if you will, of this particular transaction. MATT: Exactly. NASIR: As always, we're going to have a little overview of some of the defined terms or vocabulary. It's not to say that -- most of you probably know this information, but in the phone call itself, we may not take a moment to define them during the call because of course, it's a natural conversation, so let's go over a few words in here so that everyone's prepped for this listen. The first are a set of three. There's the term sheet, the letter of intent and memorandum of understanding. From a client's perspective, often, they use these different three terms interchangeably. In a way, they could be very interchangeable in the sense that from a legal perspective, a term sheet and letter of intent and a memorandum, they all can have the same legal effect if they're drafted in such a way. The best way to distinguish each of them is usually just from a formatting perspective. I know that sounds oversimplified, but I would say that a term sheet is probably the most informal of the three and the Memorandum of Understanding is the most formal, but all three are some written document and they all include the basic terms of the business transaction. However, a term sheet is very rarely an enforceable document. Sometimes it can be very casual, a letter of intent is pretty much always an unenforceable document. However, it may have enforceable provisions and a memorandum of understanding is almost always an enforceable document, but may have some non-binding provisions in it. Really, the distinction between the three is in the details because for example, a term sheet for which you outline the terms of buying a business that is signed by both parties could end up being unintentionally a binding document and similarly with the letter of intent and an MOU. That's why even if you want to casually offer something in a term sheet, even in an email exchange, you really should get an attorney involved very early to make sure you don't accidentally walk into an enforceable transaction t...

Intentions Are Nothing Without a Signature | Behind the Buy [303]

When a savvy buyer hears opportunity knocking to purchase a prime positioned business, she decides not to go it alone and taps in the professionals to help navigate what could potentially be a fruitful acquisition. “Behind the Buy” is a truly rare and exclusive peak into the actual process, dangers, pitfalls and achievements, that can occur when buying a business. In this limited series, hosts of Legally Sound | Smart Business provide insight and help you understand the steps that can go into acquiring a business and maybe even a piece of the American dream. Hear the calls and conversations that take place while you listen and learn about all the things that can wrong on the path to getting it right. Full Podcast Transcript NASIR: Welcome to our first episode of Behind the Buy Series on Legally Sound Smart Business. My name is Nasir Pasha. MATT: And I'm Matt Staub. NASIR: This is one thing that we've been wanting to do for a while which is let people understand what it is like to actually work with an attorney, but not only any attorney, us, as attorneys as we represent from start to finish the process of actually buying a business. This series is great for those that are thinking about buying a business or even selling a business for that matter. Not only that, for you guys to understand what it's like to actually work with counsel and to go through the process in real life, of the ups and downs like Matt said of an actual buying process. MATT: If you've never purchased a business before, this will give you a lot of insight. Probably even more so than some situations where if you have bought or sold a business before. We really go through every detail and every conversation and all the players involved. It's gonna be extremely valuable even if you're not looking to buy or sell a business right now, just having this knowledge and kind of have a general understanding of what can occur in this whole process, I think is gonna be of great value to any of the listeners. NASIR: For you new listeners, my name is Nasir Pasha. I'm joined by co host and also fellow business associate, law firm associate, attorney associate, Matt Staub. We've been doing this for years. It's been years. MATT: Yeah, we've been in the podcast game before it was cool, I think. NASIR: Well, yes. We made it cool, basically. MATT: Yeah. NASIR: It's something that we enjoy. This isn't our day job, but we love doing it. This series in particular, I think is part of the reason why we enjoy it because it's so unique. At the end of the day, attorneys are notorious for hiding the ball, hiding the nuances of what they do everyday when in reality, on one hand, it's not that complicated, on the other hand, I wish they would show because it shows what we actually do. Some of the things that we can actually help clients with and expose that. Hopefully, this series does that. MATT: This is going to be the most in-depth look that you can really find in this sort of medium. I think the listeners will be pleasantly surprised with the insight that's shown here and all the details for this business purchase. We should talk a little bit about who the series is for. The first thing that comes to mind is anyone that's looking to buy a business or I suppose sell a business as well. This is the thing you should be listening to, at least in the podcast medium. It's also pretty valuable to anyone that could possibly buy or sell a business down the road as well because these are the things that you want to keep in mind as you continue the operations of your business. It's these little things and little considerations that would be much helpful if you think about them now as opposed to when you're in the actual negotiation stage. We even saw that a little bit with our client as well. She was able to overcome those pretty quickly. It wasn't an issue, but it's very helpful to get the mind working on those things. NASIR: Well said, Matt.

From First Steps to Final Signatures | Behind the Buy [302]

GrubHub is subject to two "matters of controversy" that have likely become common knowledge to business owners: "fake" orders and unfriendly microsites.

The Dark-side of GrubHub’s (and others’) Relationship with Restaurants [e301]

Broad answers to specific business legal questions (with multiple disclaimers), Legally Sound | Smart Business is a podcast geared towards small business owners. Hosted by attorneys Nasir N. Pasha and Matt Staub of Pasha Law, Legally Sound | Smart Business touches on a variety of topics, usually from a legal point of view, with an occasional laugh.

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