Edward Jesson will be speaking at the National Business Institute Seminar: Business Contracts and the 10 Most Costly Mistakes.  He will present a topic on day two of the seminar about: "When the Agreement Goes Bad" on Friday, September 15, at 1:35 p.m. - 3:15 p.m.  

The program will provide "concrete skills to prevent, overcome and magage the top contract mistakes" and is designed for attorneys, paralegals, contractors, insurance professionals, real estate agents and brokers.
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More information about the seminar and how to register can be found on the National Business Institute Seminar website:
www.nbi-sems.com/ProductDetails/76308ER?N=0&ctname=SPKEM%2FR-76308ER%7C

The number one reason why we recommend individuals form businesses instead of operating as a sole proprietor or partner is for liability protection.   Generally, a member of an LLC or an owner of a corporation will not be personally responsible for the debts and liabilities of the business.
 
Exceptions:
 
1) If the member or owner signs a personal guarantee.   It is very common for banks and landlords to require new business owners to sign a guarantee which “guarantees” the bank or landlord that if the business is unable to pay back the loan or pay the rent, the member/owner will pay personally.
 
2) If the member or owner is personally negligent. A member/owner can be held personally liable for his own careless actions if he injures someone while operating the business. Professionals can be held personally liable for their own malpractice.  This is why we also recommend getting commercial liability insurance.  A member/owner can also be held personally liable for conduct occurring outside the scope of employment.

3) If a court “pierces the corporate veil,” meaning the LLC or corporation was merely a shell for the member/owner to carry out his wrongdoing and served no legitimate business purpose.  Three elements must be satisfied before a court will hold the member/owner personally liable:

• Control, not mere majority or complete stock control, but complete domination, not only of finances, but of policy and business practice with respect to the transaction attacked so that the corporate entity at the time no separate mind, will or existence of its own; and
• Such control must have been used by the member/owner to commit fraud or wrong, to perpetrate the violation of a statutory or other positive legal duty, or a dishonest and unjust act in contravention of a plaintiff's legal rights; and
• The aforesaid control and breach of duty must have caused the injury or unjust loss.  Green v. Freeman, 367 N.C. 136, 145-146 (2013).

Because member/owner liability is limited, and not absolute, Jesson & Rains consults with its business clients to help minimize as much risk as possible.  Please give us a call if you would like to discuss your risk avoidance strategy.

Kelly Jesson will be presenting "5 Things An Attorney Thinks All Business Owners Should Know" at BasketCASE: Redefined on Thursday, August 24, 2017, at 9:30 am.  The event will be held at Cajun Canvas.  A link to register can be found here: ​http://www.basketcaseredefined.com.  

BasketCASE: Redefined is an outstanding experience for growth-minded individuals who want to learn, collaborate and expand. This monthly workshop provides the right opportunity for engagement and empowerment.
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​Parents living longer than ever.[1]  The first generation of baby boomers have turned 70.   Cases of Alzheimer’s and dementia are on the rise.[2]  Health care costs are increasing.
 
We oftentimes get calls from adult children who want to hire us to “get power of attorney over their parent” to help them with bills and medical care.  Unfortunately, that is not the way a power of attorney works.  While the adult child can certainly schedule the appointment with us and even pay for the legal document, it is the parent’s document, and the parent is the client.  Attorneys are confined to the parent’s wishes.

If the elderly parent already lacks the capacity to enter into a contract or make legal decisions, or if the parent does not understand the effect of the power of attorney document, it is too late for the adult child to be named as their parent’s agent under a power of attorney.  If the elderly parent lacks capacity and needs help handling his or her affairs, the adult child may need to become legal guardian.

What the differences between Power of Attorney & Guardianship?
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With a power of attorney, the principal names an agent to act on the principal’s behalf in the event of incapacity.  It enables the agent to handle the principal’s business and financial affairs.  A health care power of attorney is a separate document that names an agent to act on behalf of the principal for medical decisions.  The agent’s powers are very broad unless expressly limited by the documents.  However, there is nothing preventing the principal himself from conducting business on his own.

With guardianship, a court makes a finding that the principal lacks capacity and removes that individual’s authority to make decisions.[3]  The court appoints a guardian to make those decisions from then on out. Once an institution, like a bank, learns of the guardianship, it would not be permitted to listen to the principal’s instructions – only the guardian’s.[4]  The court’s order is permanent until the principal regains capacity and a subsequent hearing is held to restore his or her rights.  Guardians have to file reports and/or yearly accountings with the court.

As you can see, guardianship is not to be taken lightly.  A court’s adjudication of incompetency essentially strips away a person’s rights, which is why we recommend getting power of attorney documents in place before capacity becomes an issue.  It is also more work on the guardian’s part due to the court proceedings and reporting requirements.  Readers should not only get their documents in place but talk to their parents or other elderly loved ones and encourage them to visit with an attorney before incapacity becomes an issue.
 
 


[1] http://abcnews.go.com/Health/story?id=118056.
 

[2] http://www.alz.org/facts/.
 

[3] There are three types of guardians: guardian of the estate (authority over property), guardian of the person, or general guardian (both estate and person).

[4] Unless the court orders a limited guardianship allowing the principal to retain certain legal rights and privileges to which the ward was entitled before the ward was adjudged incompetent.