Legal Perspective When Starting, Owning, or Selling a Business

Welcome in to Judica County Radio. Coming up today, Josh Whitaker and Joe Hamer, managing partners at Whitaker and Hamer Law Firm, going to get into the life cycle of a business. What legal issues you may face, what you should be considering while you're in business, but also the secession plan.

How do you hand off the business, sell the business? We'll talk about it all coming up today on Judica County Radio. Judica County with Joshua Whitaker and Joseph Hamer.

Welcome in to Judica County Radio. Josh Whitaker and Joe Hamer are your hosts of the managing partners at Whitaker and Hamer Law Firm. They're practicing attorneys here in North Carolina.

They've placed offices convenient for you in Raleigh, Garner, Cleveland, Clayton, Goldsboro, Fuquay-Varina, Gastonia, and in Moorhead City. I'm Morgan Patrick. My pleasure to go back and forth with the attorneys on so many interesting legal topics. You may be facing situations legally and you've got some questions. We are going to open up some complimentary consults with Whitaker and Hamer, so stay tuned for that.

Gentlemen, before we get into the business side of things, the legal side of owning a business, Josh, let's start with you. How was your week? The week so far, but I will tell you, I got up early this morning and I was on a podcast for, it's a podcast kind of like by lawyers for lawyers, and it got me thinking about something, Joseph. It got me thinking about, we have this radio show, right? Yes, we do.

That is a fact. And we talk on the radio show. And the first segment, for those of you who maybe don't listen to us all the time, the first segment, we talk about different things and then we get into the meat of it. The other segments are all us discussing legal things. But Joseph, me and you, we don't talk enough. We don't really talk during this first segment. What do you mean, man? Look, I was going to ask you, this question came up this morning when I was on this podcast and it was interesting. And we may have touched on it before, but I don't think I've ever asked you. What made you become a lawyer?

Oh, I don't know, man. To be honest, I had never really applied myself appropriately in school, in high school. And I got to college, had a lot of free time, and I didn't really do any kind of partying, man. So I was like, maybe I'll just study for school.

I'd never done that before. And it turns out when you do that, you can make good grades. So I started making decent enough grades, man.

And one of the, I think it was one of my advisors was like, have you thought about law school? And I was like, no. But then I did. And I just did it. And that's what I did. Well, Joe, that was a very exciting story. That was not the inspiring story. Hey, flip it, Josh. Let's ask you the same question.

His is going to be magical. Yeah, mine's way better than that. Well, he's obviously thought about it. So I thought about it this morning.

You snog it on me, man. I didn't have a chance to. Yeah, I was all like, you blindsided Joe.

I mean, give Joe a week and he'll come up with some really good stuff. So again, spotlight now on Josh, what clicked for you? Well, you know, I was talking to these other attorneys this morning. We were all kind of, I mean, talking about our, what the kids, my kids are really into Marvel movies and stuff. So our origin stories, like, right. How did you, how did you get started? And for me, I had this theory that most attorneys are altruistic.

Most attorneys went to law school because they wanted to. Oh yeah, I'm that. Yeah, sure. Yeah. Help. No question. Help people.

Right. And in some, I mean, there's other things like, yeah, you're like, Joe, you get good grades and it's something that you can, you can do. And I've said on the show many times, I'm an undergrad was, I was trained to be the editor of a newspaper and that's a big old timey job that doesn't really exist anymore. And, um, but I did always kind of want to go to law school. I had an attorney when I was a kid growing up in our church, he always helped out the families in the church when you had a legal problem or you got a speeding ticket or, you know, your kid got in trouble or whatever. And he was always so helpful and it's a business, you know, he charged money. Um, but he, he, you needed that help right in the, and you had to go to somebody to help you with it. And he, you know, he knew how to do it. He would do that. And I always thought of him very highly because he, he could help you. You had a problem.

He could, he could help you. And so, you know, that was kind of my thinking. That's kind of why I went to law schools. Cause you, you know, you get out of law school and you, and you just like any other profession doctor or whatever you get out of law school and you figure out it's a business.

Right. And so you got to figure out, well, how do I, you still got to feed your family. You still got to pay your mortgage, but how do you, I think, you know, I still think we're in it.

I've been doing it for 20 some years now. And I still think we're in it to help people. That's kind of where I got this morning, Joe. That was kind of where I was trying to take you. Yeah. Well, that's why obviously I want to help people, man.

I didn't say I'm out here trying to ruin people's lives. You asked me what made me decide to be an attorney. That was a great perk. Yeah.

I was looking forward to that part. Yeah. And I, I'm very thrilled to help people every day.

I feel like I'm very helpful. Deep thoughts with Whitaker and Hamer. Yeah. That was such a deep thought, man.

Can't we go with a softer start? No, man, we got to, no, man, we got to go. We got to hit, we got to hardcore, tear jerking, you know, Not, not everybody got up this morning and listened to the world's foremost podcast. Had an epiphany. Oh, wow.

Okay. But it was, it was, you know, it was this round, it was this round table of attorneys and we were, and we were talking and that, you know, that came up a lot for people. You know, they, they, they went to undergrad to do something else. Some of them had a science background.

Some of them had a more of a, you know, political science, literature, history, journalism background, but they all wanted to help in some way. And then we also talked about how it, you know, it is, it is a, it is a business. And in the end, you got to get people, you know, to, uh, you got to get the people who need your help in contact with you. And that's one of the reasons we do the radio show. One of the reasons we do this show every week is to kind of put ourselves out there and let you know what it is that we do.

So if the time comes where you need our help, you know, you know how to get ahold of us. That's right. That's the same. Ditto. So today.

I feel the same way. I think you're just too blinded by Duke's basketball success. That's all your brain can find. Is there basketball happening? No, I think you threw Joe a major curve ball and he's having a hard time going, hmm, what am I actually doing? Yeah, I'm not going to, I'm quitting. I'm going to go do something else, man.

I think I'm going to change my entire plan in life. And, uh, you know, basketball is a thing. It's good. Hey, speaking of which final four, man, a lot of folks very upset about the lack of a Cinderella, but those folks are idiots. And, um, we should all be very excited to have four really, really good basketball teams to watch basketball. And this, this show is going to air, uh, the day of the final four.

So you've got the two national semis national championship coming up on Monday, um, all number ones hasn't happened in quite some time. Maybe I was at one other time. Yeah. Oh, yeah. Oh, wait. And so all of the people in, you know, that are in these office pools that don't know squat about basketball and really went seeds. They went higher seeds and worked out. Yeah, I did.

You guys look brilliant. Yeah. I wasn't one of the meme and it was like an angry boyfriend and then the girlfriend like smiling. And it was like after my girlfriend picks all four number ones to make the final four, which never happens.

No, it doesn't happen. But I mean, it's, uh, I think it's a blessing to people who appreciate really good entertaining basketball. I want to see an underdog get destroyed by 30.

You know, it should be. I do want to, I do want to thank Rick Pitino and St. John's for really wrecking my bracket. Yeah, I was, I was out.

I was out of the money pool within like two games. Thank you. Thank you. St. John's. Yeah.

Sorry about that. You know, we were Joshua and myself. We took a trip to, uh, to Las Vegas for the first weekend of March Madness to, uh, to think about how we could better serve our clients. That was our main, that was the main reason we went write it off work expense.

Secondary purpose was continuing education, do some friendly betting. And we got destroyed, man, because there's no upsets. We, you know, very bulky. You keep looking, you keep, you keep looking for those upsets, man. I just, I want all these SEC teams to get beat, you know, as a traditional ACC fan. And all we got is Duke, which is unfortunate for non Duke fans.

I mean, when you think about it, guys, from a dominant standpoint, how it's totally flipped. The ACC used to be the school that had, you know, half the conference in the sweet 16 and the SEC got 14 to 16 teams in seven of the 16 were SEC schools. And they will have a team in the national championship. And they will have a team in the national championship. So the SEC, they, they changed their model.

Uh, they went NIL heavy on with GMs right out of the box and it shows you, uh, they threw money at basketball and it's paid off for them. And you can see the ACC doing that right now in the off season, you know, a little late, a little late, a little late. Yeah.

Yeah. But Hey, we'll see. Still have a strong chance to produce a national champion even in a very down year. So who's Duke got in the final four.

I didn't even pay attention to the floor. Duke's playing Houston and Houston's a very old and physically imposing team. My prediction is that Duke's length is going to be a problem for them at the guard spot. And that's, that's my free prediction for you. You got a, you got a point spread and what are you doing? I think they were at five and a half last I looked, which is, it's, it's nerve wracking, man.

That's a, it seems high, but at the same time, I don't know, man, that's probably what I would do if I was a betting person, you know? All right. Well, we, we do have, we wanted to, we wanted to have kind of a theme today. And so we're going to kind of trace the life cycle of a business. We have a lot of clients who are self-employed, um, run local businesses, run national businesses. And so what I wanted to do was take a segment and talk about starting a business. You know, you get an idea, you get a concept, you're thinking about starting a business, some of the things you should be thinking about. Uh, the next, uh, the following segment, can I talk about why you're running a business? What do you normally need attorneys for?

What are attorneys looking out for while you're operating a business? And then our final segment, I wanted to talk about estate planning with a business, business succession. And just kind of hit some of the finer points, some things you should be thinking about, some things that should cross your mind. And, and, uh, Morgan, I think that's where we're going to go today. Well, real quickly, Josh, let's talk a little bit about the consults we make available and what area you want to do the consults in this week. Yeah, we're going to keep, we've been getting a lot of response to free estate planning consults.

And so we're going to keep doing that. Remember, uh, you've got to, you've got to, Morgan will give you the information, but you got to call the show, leave us a message. Our folks will reach out to you. Um, but that's kind of where we're going to concentrate the free consults as estate planning. And so you got a question about wills, power of attorneys, trust, uh, that kind of thing that all falls under estate planning. And, uh, our attorneys are happy to schedule a time to talk to you for free. If you call in during, uh, call in during the show and leave us a message.

All right, there you go. So here's the number to call complimentary consult estate planning, 800-659-1186. That's 800-659-1186. And if you're a business owner and you're thinking about how you're going to leave it, this is part of it too.

You can ask questions. 800-659-1186. Grab one of those complimentary consults. Again, you're locked into Judica County Radio. Your hosts are Josh Whitaker and Joe Hamer, managing partners, Whitaker and Hamer law firm, practicing attorneys here in North Carolina.

Office is conveniently located for you in Raleigh, Garner, Cleveland, Clayton, Goldsboro, Fuquay Varina, Gastonia, and in Morehead City. We're back right after the break. We're going to talk about, again, that life cycle of the business from a legal standpoint.

It's coming up next. Welcome back into Judica County Radio. Your hosts are Josh Whitaker and Joe Hamer, managing partners, Whitaker and Hamer law firm. They're practicing attorneys here in North Carolina.

They've got offices located in Raleigh, Garner, Clayton, Cleveland, Goldsboro, Fuquay Varina, Gastonia, and in Morehead City for your convenience. We do have complimentary consults during the course of the show today. If you've got any questions about estate planning, maybe you own that business, which we're talking about today, and you're thinking about how you're going to transition the secession plan.

Maybe it's a family member. Maybe you're selling the business. These are all things you can talk about in the consult. You can call 800-659-1186. That's 800-659-1186. Again, estate planning is going to be the focus.

800-659-1186. So again, life cycle of the business, Josh, and you wanted to get into this, and certainly there are a lot of business owners out there, but at some point, they're going to have to make some plans. Yeah.

Starting a business, when we sit down with somebody who's starting a business, you're usually dealing with someone who's a pretty smart person. Usually. Usually. Usually. Sometimes. 50% of the time.

Well, there's different levels, right? But a lot of times when I'm sitting down with somebody, they've thought about a lot of stuff. There's a lot of stuff available via the Internet, so usually they've done some reading, and they've kind of got an idea of what they want to do, and none of that is bad. But when you go to an attorney, we've got very specific questions that we're going to ask you, because one of the first things we're going to talk about when you're going to start a business is what kind of business, what kind of liability are you worried about? Are you in a business where people get sued a lot? What kind of services are you going to be providing?

What kind of insurance do you have in place? Because the first thing we're going to do is talk to you about how to organize, how to form your business. And so one of the things I always tell people, this is free legal advice, is DBAs don't protect you. We have a lot of people who come in and they are like, hey, I've started a DBA, which is a Doing Business As, which some counties allow you to do. But right, Joe, there's no protection there.

Yeah, yeah, exactly. And essentially any kind of business protection you would otherwise be getting is, yeah, you don't have it, right? And that's not to say that a sole proprietorship or doing business as yourself isn't going to be a viable option for you.

There are certain situations where that may be the recommendation. But you don't get any of the insulation and the protection that you would get from a properly formed business entity, which is generally the reason why you're coming to us in the first place, right? So I think that's going to be a rare recommendation from us to not form an entity and just put together a DBA. And a DBA is not in and of itself an entity. Yeah, so when we talk about starting a business, the business is going to be a thing, an entity, its own person. If you form an LLC or corporation or a business correctly, that entity will have bank accounts. That entity will have a tax return. That entity can borrow money, buy, sell real property. I mean, you're creating a thing that if you plan correctly can live beside you.

It's its own thing. And so when you come to us talking about starting a business, we look at your forecast. What do you think it'll earn, you know, some of the liabilities you're going to take on, how we can protect you and protect your personal assets, right? A lot of people starting a business have some personal wealth that they've built up and we want to protect that. And DBAs don't protect anything. DBAs gives you a name, I guess, that you could transact business.

But in general, that's a that's a bad idea. So we'll usually talk to you about LLC versus a versus a corporation. That's normally where our conversation goes, because both of those, if you start it properly, if you form it properly, is going to give you that liability shield. So if something happens during your business and you get sued, if you've done everything the way you're supposed to, that is going to protect your personal assets. And so that's that's normally where where these conversations go. And there's a whole host of reasons why we might choose a LLC over a corporation or corporation over an LLC.

And you probably see that a lot, Joe. Yeah. And again, it's going to it's going to be situationally dependent, right? So it's we can't without sitting down and talking to you and understanding your situation, the nature of your business, you know, how many members you may have, what's your you know, how you want to be taxed.

There's just a lot of considerations that are going to we've got to understand before we can make an informed recommendation for you. So, you know, that's why it's important to come in and talk to us about your goals, about what you're trying to accomplish. And and that's a that's a starting point. Yeah. And so one of the things one of the things, too, I always look at is ownership.

Right. Who's going to own this LLC? Who's going to own this corporation? Do you do you want to you know, is there going to be stock that you need membership interest? There's is this going to be privately held?

Is this something you're going to get a lot of people involved in? How do you want to share income? If you've got multiple owners, how do you want to share debt? Who's putting in what? If you've got multiple owners, that's always a big thing, right?

If someone's putting in one hundred cash and someone's bringing skills, how do you get that one hundred thousand dollars paid back? You know, there's all kinds of things. And then and then we could talk about trademarks or IP concerns. Right. If you're putting a logo together.

And this is not something we handle in-house at our firm, but know a lot of good attorneys who deal with intellectual property, trademarks, logos, things like that that you may need. You may have some concerns about. And, you know, a lot of it depends on your budget, too. If you're starting a business and your legal budget is close to zero. Right.

That's that's one thing. And, you know, if you're starting a million dollar business and getting funding from other people, your legal budget is going to be a little different. But no matter what business you're starting, your first concern should be liability shield.

Do you have a liability should are you properly shielded from lawsuits and things like that or your personal assets protected? And number two, if you've got multiple owners, how you're splitting income, how you're splitting debt, how one owner can exit the business. Right. We had I had some folks in and and and we're talking to them. There's going to be multiple owners. And I was like, well, what if one wants to sell? Right. Because you don't you don't want to be in business with somebody you don't know. And a lot of these smaller privately held businesses. But you also want to make sure your ownership has value.

Right. So there's this line you walk where you don't want to over restrict your ownership interest. But you also don't want to be in business with somebody you don't you don't know. So and I think that's a that's a thing, man, that's that's difficult for a lot of people to conceptualize. Like when you when you're starting a business, you know, you're usually full of optimism. You know, you're you're you're thinking about the short term a lot of times. And there's a lot of front end concerns that make it easy to not see the big picture right in the end game. And, you know, a lot of things can change. And I think that's why it's important when you come to us or you talk to any attorney to to understand your situation is is going to change at some point potentially. And you need to account for that because understanding how you'll handle some of these situations that you refer to is very important early. It's a lot harder to deal with those things later in the game when you're already well established and you're potentially making a whole lot of income. And you've you're deeply entrenched into it to have to figure these things out because, you know, you can just get into some real tricky situations if you don't account on the front end. So you're basically saying, Joe, to reverse engineer it after you're in it is it's not preferable at all. Yes.

So when someone sits down with me, I'm always playing devil's advocate. Right. So you're coming in all optimistic. I get this great business concept and it's going to do well in this. And then I hope it does. I'm rooting for you. But I always like, all right, well, if it doesn't, you know, what's who's got skin in the game, who needs to get paid first?

How's this going to dissolve? You know, and so we're kind of always looking at that because that's what we see. Right. People come to us with those problems like, hey, I've got this, you know, at some other day, they formed a business with somebody else and that person's AWOL.

It's not doing anything, but still expects check. This business has been successful. This person was integral in the beginning, but is now off somewhere else, living it up and not actively participating. And, you know, thinking about salary for the person who, you know, you may have several owners, maybe only one owners doing the day to day, making sure they have a salary and they're compensated.

And so a lot of it depends on a lot of it depends on your business concept. And we can help you think through some things because we've seen it we've seen it go bad a hundred times over because because that's what happens a lot of times. And that's not we're not we're not we're not these we're not natural pessimists, right? Like we're not trying to be Captain Buzzkill as soon as you come into the office and just tell you, hey, this is everything's going to fall apart. But we like you said, Josh, we've seen the bad situations. We've seen it go bad. We've seen it go south and and just being prepared. That doesn't mean it's going to happen.

That doesn't mean you'll need this buy sell agreement or you'll need to be able to to deal with a partner leaving the business. But having the ability and knowing what that's going to look like saves so much trouble, man. And to me, guys, it sounds like just doing your due diligence and having these conversations with your client or potential client talking about the what ifs, worst case scenarios kind of sets a baseline. Look, this can happen. How are you going to handle it if it does happen?

And it may never happen, but at least you've covered that ground. That's right. Yeah.

Yeah. And it's again, I don't want to overly complicate, you know, but there's there's things to think about. And if you're putting money and assets into a business, you want to know how those are going to come back out and what it looks like if everything falls apart or a member or someone's not doing what they're supposed to. But those are all kind of the things we consider funding. Where's it coming from?

If you're going to have to borrow money, who's guaranteeing it or not guaranteeing it and loan into a business? What is what is all that? What does all that look like? So I hope when you think through, you know, some of the concerns and if it's just going to be you, like if I just come in as Josh Whitaker and like, hey, I'm starting this business, it's just going to be me. And that simplifies it a little bit. But there's still things to talk about, especially if you've never had a business before. That's right.

And if nothing else in that situation, you know, the succession plan for the business, if it is just you, you know, what do you what do you want that to look like when you pass away potentially? Because guess what? You are going to die, man. Spoiler alert.

Yeah. And let me just throw this in, too, because I know this happens. Friends get together and come up with an idea and they form a business. So it's just important to have legal a legal path, even if you're best friends. So if something happens, you have you have a roadmap to kind of get through it.

I would imagine big problems happen when friends when things don't go well and you've been friends and all of a sudden that explodes. That's right. All right.

Well, let's take a quick break. Judica County radio, Josh Whitaker and Joe Hamer are your hosts managing partners. Whitaker and Hamer law firm. They're practicing attorneys here in North Carolina. We do have complimentary consults available and in and around estate planning.

You can call at any time. Eight hundred six five nine one one eight six. Maybe you just got some questions important to have the legal part of this in place. Again, estate planning.

Eight hundred six five nine one one eight six. These are complimentary. You're leaving the checkbook at home. And just a quick reminder, Whitaker and Hamer, they placed offices convenient for you in Raleigh, Garner, Cleveland, Clayton, Goldsboro, Fuquay, Verina, Gastonia and in Morehead City. Call at any time. Grab one of those complimentary consults with estate planning.

Eight hundred six five nine one one eight six. We're back with more on having a business, the legal part of it, things you need to have in place. It's coming up next. Judica County radio, your host, Josh Whitaker and Joe Hamer, managing partners, Whitaker and Hamer law firm. They're practicing attorneys here in North Carolina and they have offices located for you in Raleigh, Garner, Cleveland, Clayton, Goldsboro, Fuquay, Verina, Gastonia and in Morehead City. I'm Morgan Patrick. My pleasure to go back and forth with the attorneys. It's it's always important to be ready legally when you own a business. Now you've decided, OK, we're talking about the lifecycle. So you're in a business now, Josh, things you need to be aware of and you need to be dotting the I's and crossing the T's.

Yeah. So in our last segment, we talked about some questions you asked during the startup phase. And so in this segment, we talk about some of the legal things you can counter once you're you're up and running. And one we touched on and maybe the biggest one that comes up is owners, shareholders. If we're talking about a corporation, members, if we're talking about a LLC, but owners may be exiting the company. So you have all these folks who come together with a great idea and then you find out maybe one of them isn't as dedicated. And so in operating agreements, Joe, a lot of times we're going to put in if somebody wants to sell out what what happens, right? First first rights of refusal for other owners, how to value their interest, how it can be sold, that kind of. And that's super important.

What you just touched on. That may be one of the biggest pieces is how to value. And because, again, if if in the absence of proactively stipulating how you're going to value, you're in a situation where, especially if you've got multiple partners, you could have vastly differing opinions. And and, you know, it's in all likelihood, the person who is staying in the business, if someone's trying to get out, is going to want to tend to undervalue whatever whatever the other person's portion is worth. And the person who's trying to get out is going to, you know, a lot of times have a higher, more inflated value. So having these things buttoned up ahead of time is just so crucially important because you're going to there's just so much conflict that you can proactively avoid.

Yeah. So in your in your in your documents that you have when you started your LLC or your corporation, it would lay out, you know, how how we're going to value for for somebody who wants to exit. Can they sell their interest on the open market? Can they do the other owners have a right of first refusal?

How do they exercise it? You know, there's all kind of things you can lay out so that if it happens, you all know how it's going to be governed because it's in your governing documents. Right. Your LLC would be an operating agreement. Your corporation would be the incorporation agreement or the bylaws.

But it would detail how a member exits. And usually you want to make that favorable to the business. You don't want a member or someone exiting the business and it craters or bankrupts the business. You want the business to be able to survive. So usually while you're all getting along and you all have high hopes, you want to you want to kind of put that in writing.

So that's that's one thing we see a lot. And then the other thing I would say is, you know, if your business is doing good, you've started your business. It's it's flourishing and you need to add employees or 1099 folks.

There's a lot that comes with that. You know, the an employee versus a 1099 contractor that's defined under the IRS and the laws of the North Carolina. And you just don't get to arbitrarily decide if someone's a 1099 or an employee. There's definite definitions you have to meet. And so I've seen that burned a lot of people, because if you have employees, there's certain things you got to do.

Right. You got to have workers comp insurance. You know, there's there's all kinds of things under the law that you have to do when you have employees versus when you have 1099 contractors. And and you've got to make sure your definition of that matches what the IRS and the laws of NC say that is. And I see that come up a lot. And understanding, you know, if you're going to have employees, how you're going to structure that super, super important, you know, because there's all these pitfalls.

Right. That that we want to try to help people avoid. And it's it's it's a lot of, you know, North Carolina being an at will employment state by default. You know, there's there's just a lot of consideration whether you're going to have at will employees, whether you're going to 1099 folks and have them be independent contractors, whether you're going to try to have contract employees.

And all of those things, again, are things that are important to understand on the front end, as opposed to, you know, when you're when you're well established and deeper into the game. The other thing and this this is kind of more of a startup concern that I didn't mention I had put it in this segment. But is what you're planning to do with your business. Do you need a license to do it? North Carolina has a lot of restrictions on things that you can and can't do, you know, without a license. So if you're opening a food truck, you know, there's things that you have to do right. If you're opening up a restaurant, if you're opening up a bar, if you're, you know, providing certain services to people, there's, you know, you may need a license personally, your business may need a license.

You may have to interact with the county or the state or the town. So licensing is always a big issue that comes up. That's right. And that's the type of thing where you want to talk about some real potential headache and some trouble and some potential legal trouble. You know, you want to make sure that you you have that. That's something that's sorted out. And, you know, you're not just figuring that out on the fly. And then you're going to want to have, you know, depending on what you you're doing, you're going to want to have contracts in place.

Right. So we use the food truck example. So if I'm coming to your food truck to buy a burger, I don't need to sign a contract for that. But there's, of course, a level of service where if you're going to be doing most anything, you need some sort of agreement signed by your your client that that deals with, you know, the expectations, the payment terms. You know, there's there's so many number of things that, again, if you're if you're not accustomed to being in business and doing this type of business, there's a lot of potential pitfalls that are very easy to avoid by contractually stipulating how they're handled. That if you do not stipulate how they're handled, you could get completely put into a bad situation and, you know, lose a whole lot more money than you're going to lose on the front end properly handling these things. And then, you know, we always tell people, you know, when you start a business, you know, you're serious about it and you start a business.

You want to get an attorney. You want a good CPA tax guy and you want a good insurance agent, because depending on your type of business, you want to make sure you're proper properly insured. You're meeting your industry standard for insurance. And that way, when something does go wrong, somebody sues you.

You know, you've got that coverage in place. That's part of the liability shield. That's part of protecting your personal assets is to make sure your LLC carries proper insurance.

You can't have an LLC with zero dollars in the bank, no insurance, and then protect your personal assets because you've not funded your LLC or properly insured your your business. So so, you know, talking through business insurance, that's usually a different guy than you know, you might have Geico or State Farm or Allstate for your personal insurance, but they might not be good contacts for your type of business insurance. So it's it's important to kind of think through that in that insurance process, too, so that you're starting off with what you need in place. I'm just looking at my notes here. I think I think that covers a lot of the things, you know, just being prepared because you're going to eventually no matter how good you are, you're eventually going to have a customer that you can't.

They seem like they're just out there. The people waiting to hire you who you can't make happy no matter what what you do. And so, again, like we told you to prepare for when you're starting an LLC, you're starting a corporation, prepare for what happens if it goes bad and why you're why you're operating. You'll you'll want to prepare for, you know, the same thing, just kind of more on a customer client level. We are going to continue our discussion on if you own a business. And the next step is going to be what do you do at the end of, well, your run. You want to sell the business. You want to turn the business over maybe to a family member, someone that's coming up in the ranks.

How do you do it? There are legal things that you need to be thinking about. We'll talk about that when we return on the other side. We want to remind you, too, we're here to help. If you've got questions about maybe your own estate plan, we have complimentary consults available with Whitaker and Hamer by calling 800-659-1186. That's 800-659-1186. Leave your contact information and say, hey, look, I'd love to have that conversation about estate planning.

Again, call the number and secure one of those complimentary consults, 800-659-1186. We're back with more at Judica County Radio right after this. . Judica County Radio, your host, Josh Whitaker and Joe Hamer, managing partners, Whitaker and Hamer Law Firm. They've got offices located in Raleigh, Garner, Clayton, Cleveland, Goldsboro, Fuquay-Varina, Gastonia, and in Moorhead City. They are practicing attorneys here in North Carolina.

I'm Morgan Patrick. It's my pleasure each and every week to go back and forth with the attorneys, sometimes referee. We have a lot of fun here on the show, but the legal importance of just being ready, especially what we're talking about today. If you're going to open up a business, we've talked about already today just the life cycle of a business, things to be aware of. And then during the course of your business run, and now, Josh and Joe, we get to the end game when it comes to a business.

And there are a lot of things here that people that are thinking about going into business or maybe they are currently in business need to know. So I'm going to hit you guys with another, I'm just preparing you. I'm going to hit you guys with another heavy thought. I don't know if I've mentioned this to you before.

What do you thought? What's going on, man? I'm just preparing you. I'm just preparing you.

What is going on in your life right now? I feel like you're having some kind of milestones going on. So I may have mentioned this before, but I had a guy tell me a couple weeks ago, and I've been thinking about it really hard. He told me the average male lives to, I can't remember what the number is he came up with.

Well, I feel like that's important. The average male in the U.S. lives to, let's say, 76. I don't know what the actual number is, but it's in the 70s. Women live longer, but men, let's say it's 76. And so then he was like, well, how old are you? And I'm rounding up. I'm not 50 yet, but let's say I'm 50.

And I was like, I'm 50. And he goes, all right, so you've got, your best case scenario for law of averages is you've got 26 years left to do what you need to get done. And he was like, you know, 26 summers, 26 more years with your kids, 26 years with your business. When you think about it like that, what are you going to do? What are you going to do? Yeah, just with life, just business in general. I mean, I feel like that, when you put it like that, man, I'm going to maximize the time I spend with my kids, my family. Like, you know, there's going to be a lot of that. There's going to be the buttoning up, making sure that all my affairs are in order. You know, just, I don't know, man, I didn't listen to this.

I didn't get asked that question. So, you know, it's almost summertime. I'm really entering a period of real optimism. I'm here to kill all that. And you're here to just destroy every single bit, man.

His point was, we're all busy, right? You got the kids doing all the stuff, you got whatever your work, business life is. And we're all rolling along here, and you hope you make it. You're not guaranteed 76, so you hope you make it that long. And maybe you make it for more, but he's like, just assume the average.

What do you think you have to get done in this amount of time that you have left? And it makes you think about it differently, right? Because otherwise, you're just rolling along, doing the best you can, which is all we can really do.

But it makes you plan more, like, okay. Anyway, it was interesting to me, and I bring it up because we're going to talk about secession planning, transition plans, estate planning when you have a business. And one of the first questions you have to ask yourself is, the business that I have, whatever it is, me and Joe, it's a law firm, right? Is this business going to die with me, or is this business something that's going to survive me?

Is the family going to be involved? Or is this something that's just going to get sold when I passed away? Do I have employees who are going to buy in? You have to figure out, will this business survive me? And so that's the first big question I always ask folks when we're talking about business succession. Yeah, and that's, it's like we said earlier, it's like I said earlier, you know, knowing, having some vision of the end game and whether that's some kind of super prosperous ending where you've built this massive business that you're going to sell and hopefully make billions upon billions of dollars, or whether it, you know, you have a business relationship that falls apart, and you've got to deal with that.

Understanding what the end game can look like is super crucially important. And you can't do that without someone who's seen it and has experience in those situations. So, and like we've said a few times here today, knowing that early and planning for it and having, you know, your operating agreement, your articles of incorporation, whatever your organizing document is, contemplating those things ahead of time is going to save you so much headache in the end, so much headache. And this is where we talk about, you know, if you've got multiple owners, do you have a buy-sell agreement, you know, in place, right? Do you have already an agreed-upon way where one owner can buy out another owner? Sometimes those agreements are funded with life insurance. If it's a partner or owner or co-owner who passes away unexpectedly, doesn't make it to the 76, right, passes away unexpectedly, and you have a way to buy his interest from whoever inherits it, spouse, trust, kids, right? So buy-sell agreements kind of come into this discussion sometimes. If you're a sole owner, you talk about a transition plan, who have you designated to, you know, take over?

And it could be a family member. It could be an employee who buys the company, something like that, so that, you know, the transition plans. And a lot of it depends on your business, right?

So if you're a dentist and your kids are not dentists, you're not really going to leave that business to them. So you're more discussing how to sell the business when something happens to you. You know, you're more worried about that. But this comes up in a lot of ways, and, you know, this is maybe not something you're thinking about in the very beginning.

But if your business is successful and you get a few years down the road, this is all things you need to think about. You may not be thinking about it. I can tell you who is thinking about it, and that's depressed pessimist Josh Whitaker going through his midlife crisis.

So there's a 100% guarantee that he is locked in on everything that can go wrong. He walked into an elevator and Tony Robbins walked on and said, what are you doing? I like the idea of Josh getting on an elevator and just being like, hey, you guys know we're all going to die. You've got a fine night amount of time. What are you going to do when you get out of this elevator? I've got to form a checklist a mile long.

I've got to get it done. But there's, you know, you don't want to leave your family, you know, with a bunch of unanswered questions. You know, if your family is not active in your business and you pass away. And that that's hard. That's hard for folks. And it takes some some planning because we all have those friends and family members who had an unexpected heart attack or, you know, something happens and have seen what families have to deal with.

If you don't have everything tidied up, you don't have all your loose ends together. And on the flip side of that, you know, you say you've got a business partner, a few business partners or a ton of employees. You know, it's not you don't want to put those folks in a bad situation either. And with the business partner example, you know, they're going to be dealing with if you do nothing, they're going to be in a situation where they could be dealing with someone who has no idea about the nature of your business. They could be volatile.

You don't have any clue what they're going to be like. So you have an obligation to them as well, just like they have an obligation to you to go ahead and solve some of these issues ahead of time and have a plan in place and know exactly what's going to happen. I did have I did have a guy come in once who was I didn't have any kids. He was he had been divorced for a long time and he so he was kind of on his own. And and this came up. I think I think maybe as a someone of his professionals mentioned it to him, like, hey, you need to talk about a succession plan.

He had very successful guy. And he was like, well, I don't. He's like, I don't care.

Right. Like, it's just me. Some people are like that.

Some people. He was like, it's just me and they can figure it out. But it's like but he had good employees who had been with him for a long time. And I was like, well, what about if nothing else? What about your employees? You know what? How are they going to, you know, keep it going? This is their livelihood.

They've been with you for a long time. And so that that resonated with him and got him got him making some plans. But it's a lot to think through. You know, when you're first starting, you don't know if you hope it's going to be successful.

You don't know. And then you get in the it will say it is successful. You get in the weeds of the day to day building the business, managing the business. And then at some point you come out on the other side where you're like, well, look, I have this successful business.

Now, what now what do I do with it? And so you don't have to figure all this out at one time. But there's definitely different stages where you're kind of thinking through and need business planning to some extent, need help from folks who have seen it before. Again, folks, just being ready. I mean, if you're a business owner and having that succession plan and having it well out.

And this is something that's not a set it and forget it. You're going to revisit this opportunity to kind of get things in writing from a legal standpoint will help that transition tremendously. Again, here on Judah County radio, we talk the legalese. But we also give you an opportunity to come in for a consult. And this week we are focusing in on estate planning, making sure you're in game is in order. And you can grab a complimentary consult simply by calling 800-659-1186. That'll get you in touch with Whitaker and Hamer again, 800-659-1186. Leave your contact information briefly what the call is about. And an attorney with Whitaker and Hamer will return that call and set that appointment for you.

Again, complimentary estate planning consult 800-659-1186. We've got more at Judah County radio coming up on the other side. Judah County radio, your host, Josh Whitaker, Joe Hamer, managing partners, Whitaker and Hamer law firm, practicing attorneys here in North Carolina. They have placed offices for you. Convenient, Raleigh, Garner, Cleveland, Clayton, Goldsboro, Fuquay, Varina, Gastonia, and in Moorhead City.

Morgan Patrick with you as well. And it's always legalese. And today we've been talking about the life cycle of a business. If you're a business owner, legal things you need to know have in place. And then also we just talked about, okay, you're towards the end. How are you going to sell the business?

How are you going to hand the business off a succession plan? So, Josh, how are we going to wrap it up? Well, we can do it a couple of ways, but I thought of another question during the break here, but it's not a heavy question. It's a light question.

Deep thoughts. You guys haven't mentioned baseball at all. Baseball just started.

That's true. Hey, what do you think about the torpedo bats, man? I saw that story today. That's got to be cheating.

They're going to have to ban it. I mean, did you see the Yankees? They set a team record, nine homers in their game with the torpedo bats. Yeah, they're just cracking home runs left and right. That's so weird about baseball.

Any other sport, you know, the equipment's like heavily governed. How do you just show up at a major league game with a different bat and go, okay, this is going to be fine? Yeah, because you saw the first, it was like 20 to 4 their first game, and they hit like nine home runs. In the second game, they blew up somebody else.

And then I didn't even know about the torpedo bats until like afterwards, you know, like how does that not get stopped, you know? I like it. I like it. I like scientific advancements in sport, you know? Well, you guys have seen the natural, right?

Robert Redford? Yeah. Yeah. So he had, you know, he made his own bat called Wonder Boy from a tree that was struck by lightning when he was a kid, and that's what he always used.

So they had to weigh it to make sure it was legal before he could use it in a game. We didn't hear anything about the torpedo bat until all of a sudden they got nine homers in a game. That's pretty good. I don't follow baseball, you know, a whole lot, but I feel like that's pretty good. We had a softball team. We had an intramural softball team. Beer league, right? Yeah.

Not officially, but Josh was drinking beer. We had some good players on the team, and we were losing, man. But we had these old bats because we were in college. We didn't have any money, and so we had whatever bats like we had lying around, right? And the other team brought their own bats, and they had these, like, skinny bats with, like, special gel.

They were just launching. That's what I feel like the Yankees are. They're just launching home runs. And we just thought everybody was better than us, and then we finally got one of those bats and everything changed. You just didn't have the proper bat set up?

Is that what it was? You weren't cheating. So we just started cheating. We got one of these fancy bats, and yeah, everything started because these people that were killing us, man, were just...

But anyway, it'll be interesting to see how that plays out because you figure Major League Baseball would have a say in something like that. But we were excited for opening day, and trying to bet on baseball, it's hard, man. I can't put it together. Yeah, I can't either, man. And I'm not going to try. That's why I don't try, man.

If I don't know it, it's not worth it. But hey, we're about to start running out of stuff to bet on, man. Well, I was about to say... Maybe you'll have to teach me who's using the torpedo bats that day, and that can be my plan of action. We got the majors in golf. I mean, they're coming up. The Masters. I mean, yeah, we got that.

You can throw a wager at that. You got any torpedo golf clubs that I need to be aware of? Well, golf's kind of like baseball where people just show up with these new irons or these new putters or these new drivers. It's not like that in basketball. That's the sport I played growing up. It doesn't matter what kind of basketball you have. And a true talent you were, brother. The legends of your playing career still to this day echo. That's all you got, man.

You got your good basketball, but it's the same as a bad basketball. Yeah, there's no real competitive advantages that you can gain there. So the firm, we talked about the life cycle of a business, the different legal concerns you have with a successful business. A business that's not successful, and you need good professionals around you. We talked about a good CPA tax guy. You want to make sure you're doing everything right, maximizing your deduction, so you need that person.

You need a good attorney who can give you good, thoughtful advice based on their experience and what they've seen before. A good insurance guy who knows your industry and what insurance you need. We talked about licensing, making sure you're licensed properly with the county, state, town, whoever you need to be licensed for with what you're doing. And really just being prepared. And then once you have a successful business, estate planning, transition plans, buy-sell agreements, things like that. So you can't skip out on that kind of planning for too long.

You may get lucky early on, but eventually things are going to catch up with you. You want to be in control of your business's life. You want to be in control of your story, and then that usually takes some fairly sophisticated planning. So that's just what you got to do. It's what you got to do.

It's literally what you got to do. So let me ask you both a question. So looking at your offspring, your family, do we have future legal minds in the Whitaker or Hamer household that might be able to take over? And obviously, Joe is a little younger than Josh. Joe, you're going to be in the business for quite some time. But do we have a Whitaker possibly that could lean towards the legal field?

There's tons of them. Well, my kids are still high school, middle school. I still got one in elementary, and they're not pushing them any one way or the other. So I think it's still too early to tell.

I definitely have one son who is very interested in law. But we'll see how it goes. I don't know about Joseph there, though. Yeah, I don't know, man. It's TBD. I hope so.

It'd be nice. But who knows, man? Who knows?

I think my kids are still young. I don't think they've gotten on that reel. They haven't really put a ton of thought into exactly what they want to do. And I don't want to force them this direction.

If they want to do it, I want it to be a natural thing. But maybe. Who knows, man? I want to make sure the kids. I always assume the kids will be smarter than me, right? They're going to be smarter than me. They got you now, man, I think.

They're going to be bigger than me, smarter than me, better than me. And hopefully they find something better, right? Maybe so. Maybe not. For sure, man.

For sure. You have been listening to Judica County Radio. Your hosts are Josh Whitaker and Joe Hamer. They're the managing partners at Whitaker and Hamer Law Firm, practicing attorneys here in North Carolina. Their office is located convenient for you in Raleigh, Garner, Cleveland, Clayton, Goldsboro, Fuquay, Verina, Gastonia, and in Morehead City. And we do have complimentary consults in and around estate planning. If you've got questions, give the firm a call. 800-659-1186. They'll line you up with one of those complimentary consults for estate planning.

That's 800-659-1186. Well, another edition of Judica County Radio is in the books. For Josh Whitaker and Joe Hamer, I'm Morgan Patrick. We will see you on the radio next week. Thanks for speaking in Generalities about the law in North Carolina and how these laws affect the average North Carolinian. If you have any questions about the content of this show, you can direct such inquiry to Joshua Whitaker at JMW at mwhlaw.lawyer.