MOWK Can Help With Your SBA Loans

The SBA Loan Program offers loans to help small businesses. While the loans are guaranteed by the U.S. Small Business Administration, they are issued by a traditional lender, such as a bank. These loans can offer more flexibility and lower interest rates compared to other lending options, making them a good way to help finance your business. However, they require very different procedures than what is expected in a traditional loan or mortgage. This is where you can gain insight and assistance from a MOWK Law attorney who is well acquainted with SBA loans. Read on to learn about the SBA program, and how our attorneys can help borrowers navigate the process.

What is the SBA Loan Program?

The SBA loan program is a government small business loan that isn’t funded directly by the Small Business Administration, but it is backed by the federal government and issued by a private lender. 

A borrower applies for an SBA loan through a lending institution, such as a bank or credit union. Next, that lender applies to the SBA for a loan guarantee. This means that the SBA will repay a part of the loan if the business defaults on payments. Additionally, the Small Business Administration requires an unconditional personal guarantee from everyone with at least 20% ownership in the company. This puts you and your assets up for grabs for payment if your business can’t make them.  

Why Hire a Lawyer for the SBA Loan Process?

When you’re preoccupied with the daily demands of running your business, it is difficult to navigate the loan process. A good way for borrowers to have a positive loan experience is by working with a knowledgeable commercial attorney. Not only can you benefit from a successful outcome, but you can also benefit from a lawyer’s guidance at different phases and to assist with various tasks, including:

  • Loan Requirements and Qualifications: There are various types of SBA loans – each with its own terms and requirements. The kind of loan that works best for is determined by what you want to use the money for. This is where our Mowk Law attorneys can help; they can match you up with loan that is most appropriate for your particular situation. 
  • Due Diligence Issues: Part of the process includes providing necessary due diligence to the lender. You want to ensure that you’re meeting all of the requirements and consulting with an attorney can help with this. For example, they can provide insight about the appropriate entities to form and can draft accompanying documents such as operating agreements and leases. In general, your lawyer can inform you of all the details of your transactions, including your rights, responsibilities, and risks.   
  • Loan Closing: It can be beneficial when a borrower is represented by a lawyer when the closing actually occurs. They can review the loan documents and go over them with the borrower and provide copies of all executed transactional documents required by the lender from the closing.  

Talk to an Experienced Lawyer about SBA Loans

It can be challenging to navigate the SBA loan process. However, you don’t want to lose valuable time to apply and then receive these significant funds to help operate your small business. You may find the process intimidating, but don’t underestimate how much a skilled lawyer can help. Our MOWK Law attorneys are ready and willing to assist you with taking advantage of your available legal options. Contact us today for more information.  

What should I know before signing a commercial lease

What Should I Know Before Signing a Commercial Lease?

Signing a commercial lease is an important part of running your business. If you’re in the early stages and need a storefront or other physical location, the standards for a proper commercial lease can be a difficult undertaking without doing your research beforehand. And fortunately, there’s more leeway for negotiating the terms of a commercial lease as opposed to a residential lease. Read on to learn about what to look for in a commercial lease in New York.

First Steps

Prior to getting to the negotiation stage, you obviously must identify your business’ needs in relation to the potential commercial space. You should have a good idea about this before you meet with the owner or the real estate agency. Describing the physical requirements of the business early can help in developing the precision of drafting a new lease. 

Features of a Commercial Lease

The rights that are generally associated with a residential lease don’t usually apply to a commercial one. That is why it’s important to know certain things about them before you commit to signing:

  • Who is the entity on the lease agreement: You should know the official party that is represented on the lease because individuals are allowed different lease terms than an LLC (limited liability company) or other business structure. LLCs may pose some risks for landlords, such as difficulties in the enforcement of breached leases for dissolved businesses and other complexities. 
  • Is subletting allowed: As a tenant, you may want to help lessen some risk by including a provision for subletting and/or sharing office space to alleviate the chance of insufficient revenue.
  • Are alterations permitted: Landlords will often include provisions concerning detailed procedures for altering the space and spelling out what superficial and fundamental changes are allowed.
  • Is an escalation rider included: This requirement provides an elevated risk to the tenant, who may be responsible for a sharp increase in rent because of the landlord’s real estate expenses or operating costs.
  • Does it include eviction and/or early termination clauses:  As a new business, the reality of economic sustainability is questionable at best. You may want to propose an early termination clause to the landlord. However, if the landlord wants a similar clause on their end, it could hurt your business. Because commercial tenants don’t enjoy the same rights as residential tenants, you need to be aware of language that makes it easier for the landlord to evict your business.
  • Will there be a personal guarantee: Many commercial leases in New York contain a Good Guy Clause (GGC). This is used in situations where the lease is in the name of a business entity, such as an LLC where the landlord requires an individual to sign a personal guarantee. Here, you can benefit from a GGC because it allows the landlord to release you from liability in case you don’t complete the lease period. It’s popular for start-up businesses.

Get Help with Your Commercial Lease, Talk to a Lawyer

The lease will be the quintessential indicator of your financial obligation and liability, so it’s important that you get things right. If you’re ready to expand to a new site for your business, contact an attorney familiar with commercial leases. Contact us today, so that one of our experienced MOWK Law attorneys can explore the best options for your business.

What Happens When You Take FMLA Leave? 

The Family Medical Leave Act (FMLA) allows you to take time off from your job to take care of your own illness or a family member’s illness or to welcome your newborn into the world by bonding with them. When an employee makes use of the FMLA, and they resume working, it can be difficult to make the transition back. However, it’s important to be mindful of possible violations of your rights upon your return. Read on to learn about your rights when you go back to your job after taking FMLA leave.

Communication Between Your Provider and Your Employer

Because the FMLA allows you to take time off to care of your own serious health condition, (in addition to caring for a family member with a serious illness or taking care of your newborn) you may wonder about your employer talking to your physician or other health care provider to verify your condition. 

Government regulations make it clear that any contact between an employer and an employee’s health care provider must comply with the Health Insurance Portability and Accountability Act (HIPAA) privacy regulations. 

Under the regulations, employers are allowed to contact an employee’s health care provider for authentication or clarification of the medical certification by using the following:

  • A health care provider
  • A human resource professional
  • A leave administrator
  • A management official

However, the regulations don’t allow the employee’s direct supervisor to contact that employee’s health care provider due to privacy concerns. The only way that an employee’s health care provider can supply health information to the employer is if the employee gives the provider written authorization to disclose. 

What Should Happen When You Return from FMLA Leave?

Coming back to work from any absence can take some getting used to and can be a difficult transition. Here are some acceptable things that may happen when you return to help you get back on track after taking the leave:

  • Meetings with supervisors and colleagues
  • Explanation of what occurred during your absence
  • Slowly getting back to taking over your duties

What Should Not Happen When You Return from FMLA Leave?

Besides the normal things that can happen upon your return, there are activities and responses that aren’t allowed under employment law. Some examples of FMLA violations that may occur include the following: 

  • Losing your benefits
  • Being put in a lower-paying position or demotion
  • Being harassed due to taking the leave
  • Experiencing retaliatory acts, including receiving a negative work performance evaluation due to taking the FMLA leave
  • Being subjected to intrusive inquires and inappropriate questions about your leave

Assert your Rights After FMLA Leave 

Regardless of the reason for taking job-protected leave, you should be able to use it knowing that you can concentrate on the issue at hand, whether it’s to bond with your newborn or to take care of your relative’s medical issue or deal with your own medical condition. If your employer interferes, be aware of the ways that you can assert your rights. An attorney familiar with employment issues can stand with you and help ensure that your rights are protected. Get in touch with a MOWK Law attorney. Contact us right away to learn more. 

Buying a Small Business in New York

After deciding to purchase a business, you will investigate specific businesses to buy. You can find them through the internet, various brokers, or via your own personal and professional connections. Once you’ve settled on a target, you will have to go through a series of actions to complete the sale. Read on to learn how to buy a small business in New York. 

Investigating the Business

You want to know that you’re getting a fair price for the business; you also want to know every facet about the business if some unknown factor could have a negative impact. Therefore, any buyer will perform due diligence before proceeding. This involves heavy investigation, including checking on tax returns, liens, leases, asset lists, permits and licenses. Looking into the employees, any violations or lawsuits should also be part of the process. 

Negotiating the Terms

This is dealt with primarily in the “term sheet” or letter of intent, which puts in writing the basic terms of the deal before the drafting and negotiating of the sale agreement. The term sheet:

  • Shows intent; it lets the seller know that you’re serious about purchasing the business. 
  • Avoids future negotiation impasses about major issues when the parties have already spent much time and money on the transaction.
  • Acts as a guide for the attorney when they draft the sales agreement.

Documentation of the Deal

These are key documents when transferring the business to the seller: 

  • Sales Agreement: Sets forth the major terms and conditions of the transaction and is often executed days or even weeks before the closing.
  • Promissory Note: Sets forth the purchase price owed, the dates for the remaining payments, interest on any outstanding payments, and makes it easier for the seller to collect from you if you default a payment.
  • Security Agreement: Seller may ask for a security interest in the assets being sold to you. Then, the seller may foreclose on the business assets in case you default on payment. 
  • Bill of Sale: Transfers ownership of the tangible assets of the business from the seller to the buyer, including furniture, supplies, inventory, equipment.

The Closing

It’s time for everything to culminate in the closing. This is the end of the process of the purchase when the parties and their attorneys come together to exchange money and property and complete the remaining documentation. Typically, the when and where of the closing is set forth in the sales agreement. It’s best if the closing goes on without incident, but there may be last-minute issues. Perhaps some closing conditions haven’t been met, or there are changes to the documents that need to be addressed, but hopefully the parties are fine with going ahead with the transaction regardless. 

Get Help with Buying a Small Business in New York

Many closings will go off without a hitch due to careful planning and willing cooperation between the parties. You will need an experienced attorney at every stage of the process when you make your small business purchase. They can help you handle barriers that arise in the due diligence process, prepare the paperwork, and deal with last-minute negotiations that occur during closing. Act in your best interest and connect with one of our skilled MOWK Law attorneys. Contact us today. 

Forming an LLC in New York

As you prepare to start a new business, you will be inundated with many things to consider and many decisions to be made. One of the most basic, but significant choices that you have to make is what type of business structure is best for your New York business. A popular choice for many is to form an LLC (limited liability company). Read on to learn about how to form an LLC in New York. 

Other Business Types

In New York, you have a couple of different options when it comes to types of business structures. Each one comes with its own sets of pros and cons. When you decide on a corporation, you are protected from the personal liability that comes from starting a sole proprietorship, which is the easiest structure to form. However, forming a corporation involves completing complex paperwork that must be submitted to the state government. An LLC combines elements of a corporation with elements of a sole proprietorship: It shields you from personal liability and contains less formalities than a corporation. For some, this is the best of both worlds, making it a popular option for small business owners. 

Steps to Take When Forming a New York LLC

Just like every state, New York has specific requirements that must be completed before an entity can become an LLC. One preliminary requirement is that the principle must be a resident of New York. Here are the next steps to forming your New York LLC:

  • Business Name: You will need to pick a business name for your LLC. The name can’t be a name already used in New York and it must contain “LLC”, “L.L.C.”, or “Limited Liability Company.”   
  • Articles of Incorporation: File Articles of Incorporation with the state and pay the required filing fee.  
  • Registered Agent: Appoint a registered agent. A registered agent (or RA, also known as an agent for process of service) is specified by the business for the purpose of receiving official legal documents, including lawsuit documents, subpoenas, wage garnishments, and other official legal documentation. 
  • Operating Agreement: Create and adopt an operating agreement for your LLC. This the key document within your company that sets up the powers, duties liabilities, rights and responsibilities of the members of the LLC to each other and to the LLC. Because it’s an internal document, you don’t have to file this with the state.
  • Publishing Requirement: Within 120 days of forming the LLC, you must publish a notice in two general circulation newspapers (one daily, one weekly) in the county where the LLC was formed.
  • License and Permit Requirements: Depending on the type of business activities, you may have to obtain license or permits from local or state governments. 

Get Help Forming your New York LLC from an Experienced Attorney

While New York doesn’t require the use of a lawyer to form an LLC, the Articles and Operating Agreement create enforceable rights and responsibilities and there are many tax considerations to contemplate. Consider using a skilled MOWK Law attorney to help you with your formation so that nothing is overlooked. We will work hard to represent your best interests. Contact us today to learn more and to get started. 

When Does a NY Contract Need to be in Writing?

Should your New York business agreement always be in writing? In general, the answer to this question is “yes.” However, there are specific rules to inform us when a type of contract must be in the written form. Read on to learn about when New York contracts are required to be in writing. 

The New York Statute of Frauds

The law that requires certain New York contracts to be in writing to be enforceable is referred to as “The Statute of Frauds.” 

There are several types of contracts that must be in writing, including the following: 

  • Any Contract that May Take More than a Year to Perform: Under the New York General Obligations Law, contracts that will take the parties more than one year to perform must be in writing. This does include employment contracts, but employment with no specific terms, (which is also known as “at will” employment) is not required to be in writing since this type of employment can be terminated at any time. 
  • The Sale or Lease of Real Estate: Under the New York General Obligations Law, any sale of real property and lease in New York that lasting longer that one year in duration must be in writing. 
  • Negotiating Services for Loan/ Real Estate Brokerage: All New York real estate transactions and transactions related to loans in New York must be in writing unless the individual providing the services is a licensed real estate broker or a New York attorney, per the New York General Obligations Law. 
  • Sale of Goods Contracts: The Statue of Frauds in New York requires all contracts in New York for the price of $500 or more to be in writing in order for the contract to be enforceable, unless there is some writing sufficient to indicate that a contract was made. To meet this requirement, there doesn’t need to be a formal long-form contract; there only needs to be some sort of writing necessary to show that there is a contract. 
  • Guaranty to Pay the Debts of Another: Under the New York General Obligations Law, any contract that assumes responsibility for the financial obligations of another individual or entity must be in writing. 

 “Promissory Estoppel” Exception

New York recognizes an exception to the writing requirement for contracts called “promissory estoppel.” Promissory estoppel will apply if the party trying to enforce an oral agreement can show all of the following elements:

  • A clear and unambiguous promise
  • Reasonable and foreseeable reliance 
  • An injury (the party must act in reliance on the promise)

Even when all of the elements for promissory estoppel are present, it will only allow an individual to avoid the writing requirement of the contract under certain conditions. This is when the failure to enforce the promise would be unconscionable, not merely unfair or unjust. Obviously, this can be a high bar to meet. 

Get Legal Help with Enforcing or Drafting your New York Contract

While the law requires only certain types of contracts must be written, in any type of business contract, you should get your contracts in writing. If you need help with drafting a contract or enforcing an oral agreement, getting in touch with a skilled legal professional is the way to go.  Contact us here at MOWK Law where an experienced attorney can work on your behalf to ensure that your interests are protected. 

the end blocks

Ending a New York Business Partnership

Most people don’t enter into a business partnership expecting it to end, but relationships can sour, problems may come to light, or even an unexpected economic downturn due to the COVID-19 pandemic can happen and necessitate dissolution. Though it sounds easy in theory, difficulties can arise if you and your partner failed to address dissolving the partnership in New York when it was formed. It’s akin to creating a prenuptial agreement before marriage – if you divorce, the prenup guides the process. If not, you start from scratch when problems already exist. 

Review All Your Business Documents

Wait to take actions that dissolve the partnership until you review all the documents related to your business. Either the partnership agreement, the Articles of Incorporation, or both may include information about how the business partnership would be dissolved. If a process is laid out, a New York business transaction attorney can review the documents and guide you through the process to ensure everything is done correctly. 

If Dissolution Isn’t Addressed in Your Partnership Agreement

If the documents offer no guidance, as often happens with informal partnerships involving spouses or family, you need to write down your intention to dissolve the partnership and send it to your business partner by certified mail to create a notification record. Though your partnership may have been informal, you want to be formal with dissolution to be on the safe side.

File Dissolution Documents and Resolve Creditor Claims

You should also file dissolution documents with New York State to notify your creditors that your business won’t take on any more debt under the partnership’s former terms. Though this isn’t mandatory, it’s prudent because as a business partnership, both partners are responsible for the partnership’s debts – any decisions made before notifying New York and creditors of dissolution obligates both partners. If you have outstanding debt or creditor claims, these must be resolved before you are free and clear.

Consider Tax Implications

It’s important you remember that, if you have them, you still need to deal with taxes owed for the year you dissolve the partnership as well as the year prior to avoid trouble with the IRS or tax offices at the local or state level. Filing annual returns or quarterly taxes will likely save you and your partners enormous headaches down the road.

New York Business Transactions Lawyer

Business partnerships form because parties believe they can achieve great things together; that’s why dissolving a partnership is generally not a pleasant experience. However, it’s important to ensure the proper steps and formalities are followed with regard to creditors and tax liabilities to avoid continued problems and stress that persists long after the partnership ends. To make sure you’re protecting yourself and completing the process thoroughly and correctly, it’s wise to speak to an experienced New York business transactions lawyer at MOWK Law before beginning the dissolution process. We will look out for your best interests and work to ensure you can confidently close the door on this chapter. Contact us today to have your questions answered and get started today.

US Patent and Trademark Office

Do I Qualify for the USPTO’s Expedited Patent Appeals Pilot Program?

Anyone who has ever dealt with the government when applying for a patent knows how slow the process can be. However, that may be changing for good. At the beginning of July this year, the United States Patent and Trademark Office (USPTO) launched a pilot program called the “Fast-Track Appeals Pilot Program” intended to fast track original design, plant, and utility patent application appeals. The program is a follow up to the Track One prioritized examination program, which successfully streamlined priority applications for both utility and plant patents. 

Goals of the New Pilot Program

The USPTO hopes the new program will advance applications more rapidly and streamline the process of ex parte appeals that take place in front of the Patent Trial and Appeal Board. The hope is that an application accepted in to the Fast-Track Program will have a decision on their appeal in no more than 6 months from the official acceptance date of their appeal into the Program. 

Guidelines Related to Program Acceptance and Length

Not everyone will be able to participate in the program. Currently to apply, an applicant must:

  • File a petition once the Patent Trial and Appeal Board issues the applicant a notice their appeal is on the docket
  • Pay a $400 petition fee

At the date the program launch, the USPTO stated the Fast Track program would run until the earlier of 500 petitions have been granted or July 2, 2021. At the end of the program, the USPTO will evaluate the results to determine whether the program should be finalized and made permanent as-is, or if additional changes are needed to make the program sufficiently successful. However, considering the success the Track One program had in a different stage of the patent application progress, it’s unlikely the program will fail and need additional work. 

New York Intellectual Property Lawyers

Anyone involved in creation of intellectual property knows the painstaking, time-consuming process and headaches involved in dealing with government agencies to get a grant of protection in the form of a trademark, copyright, or patent. Even though the process is slowly becoming streamlined, it remains to be seen if the new program implemented will be successful. Even if it is, the process is still complicated and can be confusing for someone unfamiliar with the process. For advice on the patent process, help with the application, or counsel if you find yourself dealing with an appeal of your patent application, experienced counsel can make all the difference. Contact the experienced New York intellectual property lawyers at MOWK Law today to let us answer your questions, learn more, and get started. 

Can a New York Business Refuse Entry to Individuals Not Able to Wear a Mask?

In an effort to help curb the spread of COVID-19, protect workers on the job and business patrons, and continue reopening New York, Governor Cuomo signed an Executive Order that permitted businesses to deny entry to any individuals not wearing either a mask or a face covering. Though the order sounds like a sweeping decree that everyone must wear a mask or risk entry refusal, both places of public accommodation as well as all employers must still comply with the Americans with Disabilities Act (ADA) when it comes to individuals physically or medically incapable of complying with mask requirements. 

Customer-Related ADA Considerations

Though the Executive Order broadly states anyone not wearing a mask may be denied entry to a business, this runs counter to the CDC’s stated guidance that several groups should be exempt from wearing masks. These include:

  • Children under 2 years of age
  • Individuals with breathing problems
  • Incapacitated persons
  • Unconscious persons
  • Persons needing assistance to remove a mask or face covering

Though businesses may have discretion as to whether they deny entry to some of these individuals, the linchpin issue is that even during the COVID-19 pandemic businesses must reasonably accommodate customers unable to wear a face covering or mask because of a disability. This means the ADA still applies during COVID-19. 

General ADA Requirements During COVID-19

Under the ADA, businesses open to the general public must provide equal access to its services and goods to disabled individuals. In essence, businesses must reasonably modify their procedures and policies so disabled individuals have equal access. This includes customers who cannot wear a mask –those who merely object to wearing one may rightfully be denied entry.

Reasonable Accommodations

What qualifies as a reasonable accommodation will depend on the services provided or goods sold by the business in question. In most cases, there will be ways to tailor their practices or procedures to meet an individual’s needs. These accommodations may include:

  • Curbside pickup
  • Designated shopping hours 
  • Allowing entry if the individual can safely wear a full-faced shield rather than a mask
  • Online shopping and contactless pickup or delivery; however, any website or app used for ordering must also be accessible to disabled individuals. 

Posting signs at businesses entrances can also be helpful in avoiding improper refusal; notifying customers of their ability to request accommodations if they are unable to wear a mask may help prevent ADA violations and preserve a positive relationship with disabled customers. 

New York Business Transactions Lawyer

As customers begin returning to businesses, it’s in the best interest of business owners, managers, and employees to keep customers both safe and happy. However, they must still abide by federal, state, and local COVID-19 regulations as well as other laws protecting individuals’ rights. Harmonizing these responsibilities can understandably become confusing; this is why the experienced New York business transactions lawyers at MOWK Law are here to help with the balancing act. We can assist you in finding reasonable accommodations to stay ADA compliant that still work with the policies and practices that have made your business a success. Contact us today with your questions to learn more.

Force Majeure Defenses to a Contract in New York

When negotiating a business contract, smart companies try to include all possible defenses in the contractual language to excuse nonperformance through force majeure clauses. In situations such as the unexpected outbreak of the coronavirus (COVID-19), companies find themselves unable to do business as usual, produce as promised, or deliver on agreed upon deadlines. New York’s mandated shelter in place orders for non-essential workers and voluntary self-quarantine for essential workers showing symptoms of the virus or exposed to it have put businesses’ abilities to perform to the test. Due to this, businesses are examining whether they can excuse performance under force majeure either temporarily or permanently. 

What is Force Majeure?

Force majeure is a provision included in a contract that excuses performance of obligations by either one or all parties if circumstances out of the parties’ control arise, making it impossible or impractical to perform on contractual obligations. It’s typical to see clauses enumerating force majeure events such as:

  • Strikes or labor disputes,
  • Acts of terror, wars, and epidemics,
  • Acts of God including acts of nature like earthquakes and fires or weather events such as floods and hurricanes, and 
  • Government actions such as condemnation or law changes.

Generally, force majeure doesn’t include economic hardship, but the language of the specific contract at issue will decide if the clause may be invoked as an excuse for nonperformance. 

New York Force Majeure Requirements

When it comes to impossibility or impracticability of performance due to coronavirus, New York has specific standards to evaluate. To invoke force majeure, the specific event must generally be listed in the contractual clause. There are a few possibilities invoke the clause.

Epidemics and Pandemics

The World Health Organization has labeled coronavirus a pandemic. If a pandemic is listed in the clause, the nonperforming party may claim force majeure applies. However, some clauses choose the phrase epidemic, so it would be up to the nonperforming party to argue coronavirus still falls under that definition and nonperformance is excused. 

Government Action

If, however, neither pandemic nor epidemic were included in a force majeure clause, the nonperforming party may argue coronavirus is covered by the clause of “government action” in that the State of New York has mandated a lockdown to prevent further coronavirus cases. 

Foreseeability

New York further requires that even if a force majeure event included in the contract took place, the event was unforeseen – an argument likely to succeed in the case of coronavirus’ sudden, explosive spread. Further, the nonperforming party has to try to perform their duties even after the event occurred.  

New York Civil Litigation Lawyer

Creating a contract is an important event both for both a business and any other parties to the contract. It’s important to negotiate for as many protections as possible for your business, but it’s also important to fight for those protections when unforeseen circumstances make performing your obligations impossible. To have someone looking out for your best interests and fighting for your business in uncertain times, speak with the New York civil litigation lawyers at MOWK Law today. Contact us today with your questions—we are all working remotely and fully available to new and potential clients.