Cox Padmore Skolnik & Shakarchy LLP

New York City Business Law Blog

A brief look at business entities in New York, their formation and dissolution, P.2

In our last post, we looked briefly at some of the basic characteristics of several types of business entities available in the state of New York. The business entities we mentioned last time—sole proprietorships, partnerships and LLCs—are increasingly complicated to form and dissolve, respectively.

Corporations are the most complex business form available, not only because of the corporate business structure itself, but also because of the required paperwork and the laws and regulations governing these entities. Corporations do, of course, have certain benefits over other business types, but these benefits come with tradeoffs.

A brief look at business entities in New York, their formation and dissolution, P.1

Forming a business is something that should always be done with careful planning and the best possible legal advice. Every business has different needs, of course, and selecting the proper entity type for a business helps ensure the business’ success. 

Sole Proprietorships

High-asset divorce and litigation do not always go hand-in-hand

Numerous couples in New York have considerable assets that need to be divided when they choose to end their marriages. Many of them believe that they will have to go to court in order to get fair divorce settlements. This, of course, is not something to which they look forward.

Believe it or not, high-asset divorce and litigation do not always go hand-in-hand. There may be a way for couples to achieve fair and balanced settlements without ever setting foot in a court room. For those who want to avoid litigation, collaborative divorce may be the answer.

Work with experienced attorney to establish effective marital agreements

Protecting assets from being divided in divorce is often an important goal for those entering into marriage with significant assets, and for those who are contemplating divorce where significant assets are likely to be in dispute. Even those with modest wealth can benefit from entering into an agreement prior to marriage or divorce, since marital agreements are quite versatile in terms of the issues they can address.

Couples can use prenuptial agreements not only to define what property will be classified as separate property and what property defined as marital property. They can also address things like: responsibility for pre-marital debts; maintenance during the marriage and in the event of divorce; support for children from a previous marriage; and inheritance of assets. 

Video: A legal advocate can help you focus on your business

If you own a business, or hope to own a business, then your priority needs to be on making that endeavor successful. This can be difficult when legal complications arise.

Rather than trying to resolve these issues alone, you can partner with a law firm who can tackle them while you stay committed to operating your business.

Equitable distribution and the importance of protecting assets in divorce

Previously, we began looking at the divorce case of real estate magnate Harry Macklowe, and the allegation—disputes by his attorneys—that his wife of 57 years holds title to most of the valuable assets as a result of efforts he made back in 2008 to prevent creditors from touching his assets. As we noted, one issue that will certainly need to be resolved in the case is how the couple’s property should be classified.

In New York, property classified as marital is divided equitably between the parties based on a consideration of multiple factors. In the absence of a written agreement specifying otherwise, separate property remains separate in divorce. Under default rules, separate property is defined as property: acquired prior to marriage, by inheritance, or as a gift from someone other than a spouse; compensation for personal injuries; and property received in exchange for a spouse’s own contribution to the increased value of separate property. 

Ownership of marital assets in dispute in NY City real estate developer’s divorce

New York City real estate investor and developer Harry Macklowe, as some readers may have heard from local gossip, is currently working through a divorce with Linda Burg, his wife of 57 years. She apparently filed for divorce last July after it was discovered that he had been allowing a mistress to stay at one of his apartments, less than a mile from his home.

The divorce is apparently not going well for Macklowe, as his wife is fighting for more than a simple half-half division. She is also demanding additional financial disclosure from Macklowe to ensure she doesn’t miss out on any assets that may have been diverted to the mistress. She is, of course, well advised to do so. 

Navigating issues related to restrictive covenants in the employment relationship, P.2

Previously, we began looking at the topic of restrictive covenants in New York, and specifically at noncompete agreements. As we noted, the general rule with noncompete agreements in New York is that they must be reasonable as to both duration and geographical area.

Additionally, to be enforceable, noncompete agreements must be necessary to protect the employer's legitimate business interests, must not be harmful to the general public, and must not be unreasonably burdensome to the employee. One thing employers need to keep in mind is that the position of the employee against whom enforcement of a noncompete agreement is sough can make a difference. 

Don't want to be business partners with a former spouse?

Do you find yourself thinking about the net worth of your business assets while simultaneously planning your New York wedding? Some might say business and weddings don't go together, and trying to blend the two fails in the romance department. Yet, others understand that business interests often encompass a person's greatest assets, and their protection remains of paramount importance, even when (and perhaps, especially when) planning a wedding.

It's only natural that you'd want to think ahead and protect those interests as best you can since neither you, nor anyone can predict the future. You and your soon-to-be spouse intend to spend the rest of your lives together. You might even have plans to work together in some aspect of your business. Despite these facts, part of what makes you a successful in business lies in your ability to be proactive and take preventative measures when possible to avoid problems down the line. 

How can I protect my invention?

Inventors in New York and all over the nation are responsible for some of the most amazing innovations the world has ever seen. If you're developing an exciting and useful new idea, you are no doubt concerned about preventing your invention from being capitalized on by others. In this case, having protections in place early on is essential for keeping your ideas out of the wrong hands.

As illustrated by the U.S. Department of Commerce, properly protecting your invention requires a comprehensive approach to ensure it remains secure. Before actually filing a patent, it's recommended that you file a provisional application as a preliminary first step. This document affords certain protections before a patent is put in place, such as listing "patent-pending" on materials related to your invention, as well as guaranteeing a date to officially file your patent. Provisional patent applications typically last for one year but can be extended under certain circumstances.

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