Do You Need a Pre-Nuptial Agreement?

Valentine’s Day is just around the corner and plenty of people have engagements and weddings on their minds. Besides the perfect ring, what else do you need? Everyone plans for their marriage lasting forever but sometimes circumstances happen beyond your control. Knowing that you can’t protect yourself from divorce, any steps you can take to avoid litigation and provide security is key. Many people are unaware that even property titled in their own names, can be considered marital property, depending on the circumstances.

Pre-nups can specify ownership as well as each parties’ rights to property upon death or divorce, as well as determining whether there will be alimony. The parties have a large degree of flexibility as to the terms of the pre-nup, although provisions regarding children will not be enforceable because the court always retains the ultimate authority regarding the best interests of children.

What if you’re already married? You may still be able to reach a valid agreement on these issues, which would be considered a “Post-Nuptial Agreement.” Any agreement regarding marital assets should be discussed with an attorney however, there are numerous pitfalls for the unwary.

Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC.

Non-Compete Agreements

Is a non-compete agreement enforceable?

In Maryland, if the terms of the non-compete agreement are reasonable then the Court will generally enforce the agreement.  To determine what is reasonable, many factors need to be analyzed.  Such as, what is the duration of the restriction?  What is the geographic scope of the restriction?  What is the scope of work that is being restricted?  If the non-compete is narrowly tailored to protect the legitimate business needs of a company, and its terms are reasonable, then the Maryland courts will most likely enforce a non-compete agreement.  If on the other hand, the non-compete is overbroad, seeks to restrict activities that are outside of the company’s business or geographic region, or is for too long of a time period, then the Court will not enforce the non-compete agreement.

What are the possible remedies for breaching a non-compete agreement?

If a company wants to take action against a former employee who is violating a non-compete agreement, then the company can hire an attorney to write a cease-and-desist letter asking the former employee to stop breaking the terms of the non-compete agreement.  In addition, the company can take immediate legal against the former employee and ask the Court to enter an emergency order for injunctive relief against the former employee ordering him/her to stop violating the non-compete agreement.   At a subsequent trial, the company may be awarded monetary damages caused by the former employee’s actions and the company may also be awarded their attorney’s fees if the non-compete agreement specifically allows the company to recover its attorney’s fees.

As knowledgeable employment law attorneys, we can help you navigate and figure out the best way to protect your business, trade secrets, and client base.

-Scott A. Mirsky

Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC.

Not Such a “Veiled” Threat

One type of veil is an article of clothing some women wear out of modesty to protect against unwanted attention.  Another is a religious cloth used to protect an item of particular religious significance.  The word veil also can be used to describe the divide between the bodily or corporate and the spiritual worlds – a sheath, of sorts, which separates the known from the unknown.

Corporations and limited liability companies can also be thought of as wearing a “veil.” The corporate veil protects what is underneath – the shareholders, manager, and members – from undesired personal liability for company obligations.  The corporate veil also separates what may be unknown owners from obligations that the known corporate or limited liability company has assumed.

At a wedding, a bride’s veil may be lifted to reveal the bride’s face.  In a church, a chalice veil may be lifted to give access to sacramental wine.  Some people believe that spirits can pass through the veil between the bodily and spiritual worlds.  Likewise, a company’s creditors may be able to lift, pass through or “pierce” the corporate veil to impose liability on the company’s owners.

Typically, this occurs where business owners have failed to observe the separateness of the company from the owners. This can easily can occur with single member limited liability companies set up as special purpose entities.  Other times, the corporate veil may be pierced where the company’s owners have removed assets from the company or have committed fraud or other wrongful acts.

A business can minimize the likelihood of someone piercing the corporate veil through careful business operations, including the following:

  1. Start out with adequate capitalization so that the business can support its needs. If additional capital is needed, obtain it through well-documented loans or formal capital contributions from the owners.
  1. Hold the business out to others as a separate company, with separate letterhead, business cards, contracts, and leases.
  1. Assure that the business’ assets are not co-mingled with those of the owners or any other business. Open a separate bank account for the business and make sure that business revenues and expenses are deposited into and paid from that bank account.
  1. Work with the company’s attorney to assure not only that appropriate by-laws or operating agreements are in place, but that appropriate corporate governance, such as minute books, stock ledgers, board meetings, corporate resolutions, and other business formalities, are observed on an ongoing basis.
  1. Do not make distributions to owners if that would result in the business being unable to pay its obligations.
  1. If an affiliate’s employees are expected to perform services for the business, have the business’ attorney prepare written contract that describes the services and the amount to be paid for them. Make sure the contract is honored.

Corporations and limited liability companies are formed because their owners wish to limit their liability for business obligations. However, forming the business is just the beginning.   Retaining that limited liability requires the guidance of a business attorney, good legal documentation, and careful business operations.

Elizabeth Whitman

Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC.