Where in the World . . . ?
The Terra Cotta Army is truly the Eighth Wonder of the World! We were awestruck when we entered the building where the Terra Cotta Army stands -- words fail when trying to describe it! We were surprised to find that the archaeologial dig is housed inside a museum that was built around it, and that the dig is ongoing. We were also surprised to learn that the soldiers were not found intact; rather they had been destroyed in the rebellion that took place shortly after the death of the Emperor (who had not been terribly popular). 
The Emperor had purportedly started to build his tomb when he was about 13 years of age and it took 34 years to build. He died about a year before it was finally completed, and his son became Emperor; however, he was as unpopular as had been his father, and his reign lasted only 4 years before it came to an abrupt end. The Emperor's tomb, itself, is about a mile from the Terra Cotta Army site (we saw the mound from a distance), and has not yet been excavated. Each of the soldiers has a different face, as the faces were molded from different actual people. The detail in the faces and raiment is astounding! |
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THE INFORMATION YOU OBTAIN IN THIS NEWSLETTER IS NOT, NOR IS IT INTENDED TO BE LEGAL ADVICE. YOU SHOULD CONSULT AN ATTORNEY FOR INDIVIDUAL ADVICE REGARDING YOUR OWN SITUATION |
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"Legal-ese" Speaking"
Confession of Judgment Clause: A contract clause by which one irrevocably authorizes any attorney (a) to appear in any court of competent jurisdiction to obtain a judgment -- without a hearing -- for such amount as may then appear unpaid; and (b) to consent to immediate execution upon the judgment so obtained.
Acceleration Clause: A lease provision that allows the landlord to demand payment of the total outstanding balance of the rent.
Assignment Clause: A lease provision that permits the tenant to assign the lease to a new tenant. |
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Operating a Successful Small Business
(Isn't Just About Plying Your Trade)
You are ready to hang up your shingle and open, for example, a hair salon. Your plan is simple. You have decided that, as a brand new business, you are not yet ready to form an entity (e.g., corporation or limited liability company). You have chosen the name "Hair's the Deal" and you have found office space just the right size to accommodate a small reception area, two sinks, two good-sized work areas, and a powder room. Your new landlord has provided you with a building allowance for the build-out of your space, and you have found a contractor to do the work. You have ordered salon chairs, mirrors and supplies, and have found just the perfect reception desk at a discount outlet. You are scheduled to 'open' on December 1st in time, you hope, to take advantage of the holiday season.
Can you spot at least a dozen issues in the above "simple plan":
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Is the name you have chosen "available?"
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Are you totally familiar with the terms of your lease and do you understand all of your rights and obligations?
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Does your lease contain a "confession of judgment clause (and do you know what this means)?
- Can you assign your lease if business does not go well?
- Does your lease contain an acceleration clause (and do you know what this means)?
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Did you sign an agreement with your contractor?
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Are you totally familiar with the terms and conditions of the construction contract?
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Did you finance your equipment and do you understand the terms and conditions of your financing arrangement?
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What kind of warranties do you have on your equipment?
- Who assumes the risk of loss if the equipment is damaged during shipment?
- Do you plan to hire one or more employees? Are you familiar with salary, payroll and tax issues?
- If you are going to sell any of the hair care products, have you filed the PA-100 for sales tax purposes?
In addition to the legal issues, have you studied the demographics of your location for purposes of marketing and selling your service and/or products? What kind of publicity do you plan to do? How will you handle your bookkeeping?
There will be many more aspects to running your small business than cutting, coloring and styling hair. You have gone to school, attended seminars and, perhaps, "apprenticed" in an upscale salon to gain valuable experience. When you undertake to go out on your own, however, you also must be familiar with and take responsibility for all of the administrative, tax, marketing, publicity, networking, contracts, purchasing, invoicing, paying the bills and doing the payroll, just to mention a few. You will not likely have the money to hire personnel to handle these matters in-house -- i.e., you are it!
Consider building a team of professionals -- banker, lawyer, CPA -- to whom you can turn when you need help with your legal, tax, employment, marketing and other issues! The time to do this is, of course, before you choose your location, sign a lease or other contract, sell products, hire employees, or file your first business tax returns. Remember the old adage: "An ounce of prevention is worth a pound of cure!" |
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Learn What You Need to Know
at Monday Moorings!
Monday Moorings is a series of 15 workshops designed to give you practical hands-on solutions to "moor" your business.
Workshops are held each Monday evening
from 7:00-8:30 p.m. at our Aspinwall office. Whether you attend one, two or all 15 workshops, you will receive:
- an autographed copy of Beth Caldwell's book, "I Wish I'd Known That (Secrets to Success in Business from Women Who've Been There)"; and
- a leather business card holder containing a business card for each presenter.
The next workshop is scheduled for September 20th. Barbara Ann Mohajery, Esquire, will talk about the various forms of business and business names.
Cost: $20.00 per workshop
SEATING LIMITED TO 15
FIND A COMPLETE LIST OF WORKSHOPS ON OUR WEBSITE AT:
www.aspinwall-law.com
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September "Q & A"
Q. On January 1, 2010 I signed a 3-year lease for office space. My rent is $1,200 per month for first year, then it will increase 10% for each of the next two years. The total for all 36 months of the lease term is $47,664. My husband has been transferred and I am going to have to find someone to take my space or terminate my lease. What are my options?
A. First of all, the answers to your questions should be contained in the lease, itself. You should look to see whether the lease contains an "assignment" clause. This will tell you whether you are prohibited from assigning the lease under any circumstances, or whether you may assign the lease, but only with prior written consent from the landlord. If the latter is the case, there is no recourse against a landlord who arbitrarily says "no." Hopefully, however, the assignment clause contains language specifying that the landlord's refusal to consent to an assignment must not be unreasonable. Assuming that you can assign the lease without issue, the landlord will likely require that you continue to be bound by the lease; i.e., if the assignee does not pay the rent, then it remains your responsibility to do so.
Your lease probably also contains an "acceleration" clause. The 'cost' of your lease is $47,664 for the 3-year term. This amount is payable in the monthly installments you have described above. If you are terminating the lease early, the acceleration clause allows the landlord to look to you for the balance due for the entire lease term; thus, if you terminate the lease effective October 1, 2010, you will be responsible for the balance of the rent for this year ($3,600), plus rent for 2011 ($15,840), plus rent for 2012 ($17,424), for a grand total of $36,864. And, because it is a business lease, the landlord has no obligation to try to find another tenant (although many will try to do so).
If your lease also contains a "confession of judgment" clause, the landlord may simply go to court without any notice to you, get a judgment for the $36,864, and then proceed to execute on that judgment.
Your best bet is to try to negotiate something with the landlord in as amicable a fashion as possible. After all, the landlord's ultimate goal is to have the space occupied continuously and to be assured that the rent is going to continue to be paid. If you can find another tenant willing to step in, and a credit check by the landlord is favorable, there should be no problem in assigning the lease. If you are unable to find a tenant, you may be able to negotiate something with the landlord. For example, you may agree to continue to pay the rent for a certain number of months during which the landlord agrees to make a diligent effort to find another tenant and, assuming that the landlord is able do so, you are excused from further performance under the lease.
It is always a good idea to have your attorney review any lease before you sign it. If you knew, for example, that there was a possibility that your husband could be transferred during the term of your lease, it may have been possible for your lawyer to negotiate an 'escape' or 'early out' clause of some kind before you signed on the dotted line. |
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