Business Formation

Once you’ve decided to start a business, one of your first decisions will be to decide what type of business entity you wish to form.
Under Washington law, some of the available choices include:

  • S-corporations and C-corporations
  • Limited liability companies (LLC’s)
  • Partnerships
  • Sole Proprietorships

Among other concerns, your selection of business entity will affect whether you have personal liability for your business’s financial obligations. You will also want to consult with an accountant to determine the tax consequence of your selection.

What Is a Corporation?

A corporation is one type of business entity. The shareholders are the owners of the corporation, and they have the ultimate say in the corporation’s business. The shareholders elect a board of directors to run the corporation. Usually the board acts through corporate officers, such as the president, vice-president, and secretary, who are persons who run the corporation’s day-to-day operations. This may sound like a lot of people. However, in reality, a corporation can consist of just one or two people who each wear many different hats

One advantage to a corporation is that, unlike a partnership or sole proprietorship, the shareholders are not normally liable for the corporation’s obligations. This “corporate shield” is one of the primary reasons why many business owners will select this entity. However, a “Limited Liability Company” (“LLC”) can also afford this same protection. An experienced business attorney at Deno Millikan can help you determine what the best entity will be, based on your specific circumstances.

How Do I Create a Corporation?

The process of creating a corporation is called, “incorporation”. In order to incorporate your business in Washington, you must file the Articles of Incorporation with the Washington Secretary of State. These “Articles” include information such as the name of the corporation, the names of the directors, the names of the incorporators, and the name and address of your Registered Agent.

The Registered Agent is the person who agrees to receive legal documents on your behalf. The Registered Agent can be anyone, and is frequently one of the directors. An attorney can also serve as the Registered Agent.
You will also need to issue stock and create bylaws. The bylaws provide more detail about how the corporation operates, and can be quite lengthy and complex. Finally, as with any other business entity, you may need to apply for specific business licenses and permits through state organizations, and pay taxes.

Finally, simply forming the corporation is not enough, it is also necessary to maintain the corporation. This includes requirements such as annual meetings, board resolutions, and annual reports. If you fail to follow these rules, your corporation could be administratively rendered “inactive”.

Limited Liability Companies

A Limited Liability Company or LLC can be simpler to maintain that a corporation, and shares many of the same benefits. It is the preferred entity of many small businesses.

Consult an Everett Business Attorney

If you are considering forming a business in Everett, Snohomish County, Skagit County, or King County, speak with one of the business law attorneys at Deno Millikan Law Firm, PLLC early on in the process. The earlier that you get an experienced attorney involved, the better we can assist you. You can reach us today by calling (425) 399-7279.

Business Litigation

Business owners face a variety of challenges. Disputes inevitably arise. The best course of action is to establish a relationship with an attorney early on and consult with them frequently. This is a case where “an ounce of prevention is worth a pound of cure”.

By consulting with an attorney regularly, you can protect yourself against disputes, such as:

  • Discrimination claims from current or past employees;
  • Confidentiality and unfair competition regarding misuse of your company information by current or past employees;
  • Disagreements with customers, suppliers, employees, or contractors.

How a Business Litigation Attorney Can Help

At Deno Millikan, we are litigators. In other words, we have real-world courtroom experience. We can help you decide whether to settle outside of court, to compromise, or to proceed to trial. Only a litigator can fully inform you of the risks and costs associated with litigation. Only a litigator can give you the information you need in order to make an informed decision. Only a litigator can guide you from the inception of the dispute, through resolution.

Consult a Business Litigation Attorney

No matter what product or services you offer, if you own a business in Washington, you will benefit from having an experienced firm on your side. You may contact the business litigation attorneys at the Deno Millikan Law Firm, PLLC at (425) 399-7192 for an initial consultation.

Breach of Contract Attorneys

What Is a Contract?

Technically speaking, there are three elements to a contract: offer, acceptance, and “consideration” (an agreed upon exchange of value). While an oral contract can be difficult to prove, it may be just as enforceable as a written agreement. Any action signifying agreement between two or more parties can create an enforceable contract.

When two parties enter a contract, written or otherwise, they have legal obligations. Should one party fail to uphold its end of the contract (in other words, “breach” the contract), the other party (the non-breaching party) may be entitled to compensation, often referred to as “damages”. Some breaches are serious enough to terminate the contract altogether; other breaches only entitle the non-breaching party to damages, but still requires that the contract be completed by both parties. This question requires a careful analysis by an attorney experienced in contract disputes.

Types of Contract Disputes

Both individuals and businesses can be parties to a binding contract and therefore be liable for damages in the event of a breach. Some of the types of contracts in which disputes commonly arise include:

  • General commercial contracts;
  • Employment contracts;
  • Sales agreements;
  • Insurance policies;
  • Shareholder contracts;
  • Partnership agreements;
  • Contractor agreements;
  • Privacy agreements;
  • Debt collection contracts;
  • Loan agreements;
  • Lease and real estate contracts;
  • Warranties and service agreements;
  • Non-compete contracts;
  • Personal guarantees, and
  • Service agreements.

Taking Legal Action for Breaches of Contract

If you have suffered a loss because of another party’s breach of contract, your options may include:

  • Asking the court to enforce the contract according to its own terms, including any specified penalties (“specific performance”);
  • Canceling the contract, and filing a lawsuit to recover any additional costs you’ve incurred in finding a substitute; and
  • Continuing with the contract, but filing a lawsuit to recover your increased costs, loss of business, or other damages you’ve suffered.

What Happens If I Sue?

There are two dimensions to any lawsuit involving a contract: the first is whether there is liability on the part of the breaching party; and the second is the amount of the damages. “Liability” means that a party is found to be at fault. Without fault, there can be no damages.

If the court finds that someone at fault, there are several measures of damages. For instance, you may be entitled to “benefit of the bargain” damages. In other words, the court may order the breaching party to pay you a sum of money that puts you in the same position as you would have been had they honored the original agreement.

In other cases, the court will order that the breaching party fulfill its end of the bargain. This type of “injunctive” relief is less common than money damages and is often referred to as “specific performance”.

Another measure of damages is called “unjust enrichment” where one party has bestowed a benefit on another that, in all fairness, they should be compensated for.

As you can see, there are numerous ways of calculating damages. An experienced contracts attorney at Deno Millikan can review your matter and advise you what the most likely calculation is.

Other Contract Provisions

In addition to the contract provisions that describe the parties’ obligations, many contracts contain numerous other clauses. For example, many contracts contain “attorneys’ fees” clauses that entitle the prevailing party to recover the costs of its lawsuit.

Other examples of contract provisions might include a description of what happens should one of the parties fail to perform. An example of this type of provision would be a liquidated damages clause, where the buyer of some real estate is required to pay a sum of money should he (or she) back out of the transaction.

Finally, many contracts contain provisions for alternative dispute resolution (“ADR”). You may not be able to sue in court, and instead be limited to arbitration or mediation. An experienced attorney at Deno Millikan can review the contract, advise you of your options, and give you an analysis of you best course of action. Or, an experienced attorney can suggest other provisions that limit your risk, and increase the probability of the success of your business venture.
Contact our office today at (425) 399-7192 to schedule a case evaluation. Let us discuss your legal options and how we may be able to assist you in resolving you contract dispute and recovering you losses.

Contract Negotiations

Contracts are fundamental to business. In some situations, a simple handshake suffices, while in other situations, a complex, multi-page document is required.

Small businesses are often presented with complex, multi-page documents drafted by experienced legal counsel from much larger organizations. If you are concerned that you may not fully understand a contract that you are being asked to sign, you should consider having and experienced attorney review it and advise you on its legal consequences. A poorly negotiated or misunderstood contract may cost you both time and resources, and can completely derail your business.

Our legal team understands how vital it is to you and your business to successfully navigate complex contract negotiations. We take the time to understand you company’s unique needs and represent your best interest, whether you are negotiating a salary and benefits package for employment, forming a business venture, leasing or purchasing property, or re-negotiating an agreement with a longtime business associate.

Basic Components of a Business Contract

A contract is a legal agreement for an agreed upon exchange of value between you (or your business) and another person or business entity. Indeed, you may have cause to enter into a business contract with any number of parties, including:

  • Outside contractors;
  • Vendors (suppliers, software providers, etc.);
  • Employees;
  • Business partners;
  • Property owners/landlords; and
  • Banks.

A well-crafted contract will clearly set forth include certain key components:

  • Definitions – all terms, including the names of the parties subject to the agreement, should be sufficiently clear for everyone to understand. Any ambiguous term should be clarified in this section;
  • Recitals – a statement about the purpose of the contract;
  • Consideration – a clear statement of what each party will receive as a result of the contract, such as a finished product of a specific fee; and
  • Terms and conditions – the rights and obligations of each party should be clearly articulated. For example, when is the contract to be completed? Where is performance to be tendered? What happens if someone fails to honor their obligation? The list of terms and conditions is potentially vast and may determine whether the contract is attractive, or whether the risks outweigh the potential reward;
  • Signatures – the names and titles of the persons executing the contract.

One of our business attorneys will assist you in ensuring that your contract includes all of the required components so your risks are fully understood before you sign on the dotted line.

Contact us today to schedule you initial consultation with the Deno Millikan Law Firm, PLLC today. We can negotiate on your behalf, or advise you. Our scope of services is as broad or as narrow as you deem necessary for your particular circumstances.