Legal Protection for Business Owners & Agents
Alpharetta Business Attorneys - 770-648-0744
Corporation codes and limited liability laws limit the liability of the
owners for certain actions taken by the company and the other owners.
However, sophisticated business owners typically rely on a number of other
devices to shield themselves from liability for company actions taken
in good faith, and to establish and preserve their rights. Our firm, The
Law Offices of David E. Oles, has experience helping our clients structure
appropriate and dependable protection for the company and for its owners,
directors, officers and agents. With an
A+ Rating by the BBB® and a track record of success, you can trust that our Alpharetta business lawyer has the ability to
handle even the most complex cases.
Common means of protection for owners, executives and directors may include:
- Indemnification Obligations
- D&O Insurance Coverage
Documents Establishing Protection for Owners & Agents
Agency Agreements – Businesses require contracts for the individuals and entities
they engage to perform services for them. Agency agreements establish
the areas in which the agent may exercise authority for the business,
and also the manner and amount of compensation the agent will be paid.
Commission Agreements - Companies often enter into formal written contracts with their sales
force, under which the terms of performance and commissions are established.
Commission agreements also may include what happens upon termination,
and other events that may occur.
Executive Compensation Agreement
s - Typically executives will have carefully structured agreements setting
for the term of their engagement, the amount and nature of compensation,
the terms of any bonus or incentive pay, and the conditions under which
either party may terminate the relationship.
Employment Agreements – Businesses often enter into formal written agreements with key
employees whose loss would be harmful to the business. Employment agreements
typically establish the length of employment, the rate and manner of compensation,
and the conditions under which the relationship will terminate.
Equity Agreements and Option Agreements – Some enterprises, particularly new ones, do not have significant
cash flow and may offer shares of ownership as compensation to certain
employees. This may be a large or small component of overall compensation.
These agreements will typically establish the amount of ownership the
employee expects to receive, the amount of time he or she must stay in
order to be eligible, and the manner in which the equity share may be
converted into cash.
Golden Handcuffs – This refers to arrangements whereby a company enters into financial
incentives with an officer or employee to remain with the company.
Incentive Agreements - Businesses may enter into contracts with agents in order to provide
incentives to perform certain tasks, such as close sales contracts, locate
and complete acquisitions, sell assets or take other action valuable to
the company.This may include the use of:
- incentive options
- restricted stock
- other forms of compensation or reward
Sales Agreements – Companies often enter into formal written contracts with their
sales force, under which the terms of performance and commissions are
established. Sales agreements also may include what happens upon termination,
and other events that may occur.
Severance Agreements – Severance agreements establish the terms under which a departing
agent or employee agrees to release the company from liability for things
that may have happened during the term of engagement. The law requires
strict compliance with legal requirements in order for these agreements
to be effective.
Indemnification This concept refers to the terms under which the company or agent will
make the other whole for damage it has caused. Indemnification typically
requires that the agent have taken actions on the company behalf in good
faith, and met other special conditions.
Insurance Coverage and defense Closely related to the concept of indemnification, companies will typically
contract with third parties to absorb certain risks of loss. Common insurance
policies including liability policies, Directors and Officers liability
policies, automobile and truck policies, and life insurance policies.
Special terms set out the conditions under which an employee, agent, officer,
or company is entitled to indemnification and disputes over coverage and
liability are common.