Many people may not know what a contract is, let alone whether or not it should have an Alternative Dispute Resolution (ADR) clause. In this post, we will explore the difference between ADR and litigation, as well as why you might want to include such a clause in your contract. 

The art of negotiating contracts and agreements is something that every business owner has to learn. There’s always a risk of disagreements, breaches in contract or agreement terms, and lawsuits on the horizon; but when these issues arise it can be costly for all parties involved.

What is the Alternative Dispute Resolution (ADR) Clause?

If you are in the process of creating an agreement, it is important to include a clause that addresses how disputes between you and your partner will be handled. If this is not included in your contract, then the default law for where you live will apply. This is why our team here at Raich Law PLLC highly recommends getting a business lawyer to assist you when drafting any type of business agreement.

If you’re looking to resolve your disputes in a more amicable way, this standard clause will be perfect for that. It includes an alternative dispute resolution (ADR) period of negotiation and then mediation before submitting the dispute to litigation or arbitration. This type of clause is sometimes referred to as an escalation clause due to its requirement that all parties agree on ADR methods prior to initiating any formal legal system proceedings.

ADR vs Litigation

Litigation and ADR are often paired in law school. Litigation refers to the process of preparing a case for court. Alternative dispute resolution (ADR) includes mediation and arbitration, processes which can take place either independently or during the course of litigation within courts.

Litigation has been the traditional method of resolving conflicts for centuries, while mediation is a relatively recent invention. Mediation differs from litigation in that parties are free to pursue other avenues if they remain dissatisfied with their agreement. In contrast, decisions made during trial can be binding and difficult or impossible to overturn later on down the line. 

Do My Contracts Need an ADR Clause?

When deciding whether or not to include a contractual provision mandating ADR in the event of any future dispute, careful consideration and exploration is necessary. If you want disputes resolved before resorting to litigation on one hand then including mediation as an option would make sense with some reasonable time parameters specified.

If you’ve ever had to implement an ADR clause then you may or may not have had issues when the situation presented itself – it is important that all parties are aware and acknowledge this part of your agreement. This element must be clearly stated in order for a court to enforce any settlement made under such terms.

Have you ever had to implement an ADR clause in your contracts? Did it cause issues when the situation presented itself? If so, then consult with a Nevada contract attorney before finalizing your agreements. They can help make sure that all of those elements are there for enforceable clauses.

Nevada LLC Member Disputes or Partner Disputes in a Nevada Entity

Some of the most common Nevada LLC Member Disputes, or Nevada Partnership disputes for that matter, are those between members of the LLC or partners of the partnership. The first step in resolving such disputes is to reference the governing document of the relationship between the parties to look for how the parties agreed to handle disputes in the Nevada LLC Operating Agreement (in case of an LLC) or the Partnership Agreement (in case of a partnership). Should there not be an Operating Agreement or a Partnership Agreement or should either agreement be silent on the terms of conflict resolution, it is best for the disputing parties to attempt to resolve the matter amicably.

Usually, the parties can reach a law firm, like Raich Law PLLC, to attempt to mediate the issue and record such mediation via a resolution. Should the dispute between the members or the partners be hostile or should it not be able to be resolved through mediation, the parties can agree to dissolve the Nevada LLC or Partnership and go their separate ways; however, it is often the case that one party usually wants to continue to run the business. So what can be done when Nevada LLC Member Disputes or Nevada Partnership disputes end up that way?

How to Handle Nevada Partnership and Nevada LLC Member Disputes

When one party wants to continue the business and the other wants to dissolve it, there is no one-size-fits-all solution. This situation is a case by case issue that Raich Law PLLC, your trusted Las Vegas Business Lawyers has addressed in the past and can address in your matter as well. If you find yourself in a dispute with a fellow member or a business partner, feel free to reach us at (702) 758-4240 for a free consultation to see how we can resolve the issue and achieve your desired outcome.

The Nevada LLC Operating Agreement is one of the most, if not the most, important governance documents for a Nevada LLC. While the Operating Agreement is not mandatory in the State of Nevada, it is highly recommended that an Operating Agreement be agreed upon and be in place for any Nevada LLC with more than one member. While the Nevada Revised Statutes guide in the absence of an Operating Agreement, courts generally defer to the terms of a Nevada LLC Operating Agreement to resolve any issues that might arise in the LLC and its operations. Some of these Important Nevada LLC Operating Agreement Clauses are listed below.

Basic Nevada LLC Operating Agreement Clauses

Most Nevada LLC Operating Agreements have standard clauses. Such clauses include the name of LLC, the business conducted by the LLC, the location of the LLC’s offices, information on the registered agent, who the Members of the LLC are, what the ownership percentage is of the Members, capital contributions of the Members, roles and responsibilities of the members, how members are compensated, and other similar terms.

Specific Nevada LLC Operating Agreement Clauses

To be effective, operating agreements must also contain provisions for any limitations on the members given their roles (access to bank accounts, engaging in contracts with others, etc.), guidelines on selling or transferring membership interests between members as well as to third parties, how the company shall vote, and what percentage of the Members need to vote for certain issues to be resolved (new business, taking on a new member, etc.).

Miscellaneous Nevada LLC Operating Agreement Clauses

Nevada LLC Operating Agreements need to have additional clauses regarding dispute resolution, venue (should a dispute arise), arbitration (if the Members agree), how to make amendments to the Operating Agreement, etc. In addition to the clauses above, a Nevada LLC Operating Agreement must reflect clauses and terms specific to the industry and to the business conducted by an LLC.

At Raich Law PLLC, we have drafted countless Operating Agreements in many industries and sectors and are aware of some key ideas to include in such Operating Agreements. If you would like to discuss drafting an Operating Agreement for your LLC or if you’d like a review of your LLC’s Operating Agreement, we will be glad to assist you. Give us a call at (702) 758-4240 – the Consultation is Free so you have nothing to lose!

Nevada Business License

To have a valid Nevada Limited Liability Company (LLC), you must file for a Nevada Business License, file an Annual List of Officers, and file the Articles of Organization. If you have already formed a Nevada LLC, then you must file annual renewal documentation so the LLC doesn’t go into default. If the LLC goes into default, the Secretary of State will charge additional fines and penalties to bring it into active status.

Regardless of whether you are filing for a new Nevada LLC or renewing one, you need to have a Registered Agent with a physical address in Nevada. Please note that these are only the requirements to file with the Secretary of State. Additional requirements for taxation (both federal and state) and for licensing in your specific industry will apply.

Nevada LLC Secretary of State Fees

Currently, for a new Nevada LLC, Nevada’s Secretary of State charges a total of $425.00. As of this article the current Nevada LLC fees are as follows:

• $200 for Nevada Business License
• $150 for the Annual List of Officers
• $75 for the Articles of Organization

It is $350 to renew a Nevada LLC. As of this article the current Nevada LLC renewal fees are as follows:

• $200 for Nevada Business License
• $150 for the Annual List of Officers

Please note that Nevada updates such fees frequently. Visit the Nevada Secretary of State Website for the most recent fee schedule.

Nevada LLC Records/Documentation Requirements

Nevada doesn’t have as stringent corporate record keeping and corporate formalities requirements for LLCs as other states do. Generally, a Nevada LLC must keep records of ownership and Operating Agreements, if any, along with accounting and legal records. An Operating Agreement highlights and lays out what the LLC does, who the members are, ownership percentages, the rules with which the LLC will operate, and more. Nevada LLCs are not required to have Operating Agreements, but having one is highly recommended, especially if the LLC has more than two members (owners). If the Operating Agreement requires the maintenance of certain documentation including, but not limited to, accounting ledgers, client lists, transaction reports, etc., they must be maintained at the LLC’s offices.

Raich Law PLLC in Las Vegas has filed many LLCs with the Nevada Secretary of State and can help you with any questions you may have in filing for an LLC, costs of an LLC, or the Records/Documentation for an LLC. For a free consultation, fill out our contact form or call us at (702) 758-4240 and speak to a Nevada Licensed Attorney today!

Starting a Business in Nevada

Nevada is one of the most sought-after states for incorporating a business. Many across the United States are starting a business in Nevada due to the low Secretary of State fees and very good tax structure. From the entrepreneur starting a business in Nevada, to the large company trying to benefit from Nevada laws and taxation, Nevada has firmly established itself as one of the go to states for new businesses in the United States.

Pros of Starting a Business in Nevada

Generally, Nevada has consistently had some of the lowest incorporation fees in the country, thereby allowing entrepreneurs and new business owners to incorporate for relatively cheap. Specifically, regarding taxes, Nevada has no state corporate income tax, does not have a state personal income tax, does not have a franchise tax, and does not have a tax on the shares of a Nevada corporation.

Furthermore, given the ease of the Secretary of State’s office to work with businesses, many businesses find it very easy and are very comfortable incorporating in Nevada.

Finally, Nevada laws are very favorable to companies and their management. This includes the idea of “piercing the corporate veil.” Piercing the corporate veil refers to the idea that a potential plaintiff might be able to get past the company and go for the assets of the company’s managers or owners to seek compensation.

Nevada law has consistently been in favor of protection of Nevada company managers and owners and has prevented such piercing of the corporate protections in many cases. Many court cases and employment rules and regulations have also been seen as benefiting employers and their rights. While, Nevada does have employment and labor laws, including those mandated by federal laws, Nevada is generally considered to be an employer friendly state; however, there are some difficulties and cons about incorporating in Nevada.

Cons of Starting a Business in Nevada

Nevada requires that every incorporated entity have a registered agent that has a physical address in Nevada. A registered agent is a person or business that accepts legal paperwork on behalf of the incorporated entity. Thus, while anyone outside of Nevada can form a Nevada entity, the registered agent must be someone or some company with an address in Nevada.

Another potential issue with starting a business in Nevada is that should an issue arise, Nevada law, while developed, is not as developed as the case law in other states such as California or Delaware.

Finally, Nevada has laws that require proper corporate record keeping and maintenance, which must be followed.

We Make Starting a Business in Nevada Easy

Raich Law PLLC in Las Vegas has formed various entities over the years and would be glad to assist you with starting a business in Nevada. We can serve as the registered agent, provide for a review of Nevada law on your specific company’s industry, and can discuss with you the requirements that you would need should you incorporate in Nevada. We can even form the company, and complete all paperwork for the business license, annual list of officers, and the articles of organization for your entity. For a free consultation, fill out our contact form or call us at (702) 758-4240 and speak to a Nevada Licensed Attorney today!

Welcome back to the Raich Law PLLC blog! Last week we shared some information on contracts when you buy or sell a business in Nevada in part two of Tips for Selling or Buying a Business in Nevada. Today, in the third and final part, we discuss closing and beyond when you buy or sell a business in Nevada.

Tips on Closing and Beyond When You Buy or Sell a Business in Nevada

When most deals close, parties generally go their separate ways. The buyer starts operating the business for growth while the seller takes his or her proceeds and pursues other opportunities, but is closing really the end of the transaction? Generally not. Even after closing, parties owe certain duties to each other – most of which are included in the contracts themselves.

For example, any confidentiality provisions, any non-compete provisions, etc. continue beyond the closing of the transaction. Furthermore, and perhaps most importantly, the financing remains an issue if the transaction included potential payments on a note or Buyer offered to pay Seller through the proceeds of the business. It is extremely important for parties to have continuing reviews of the transaction, even after closing, to ensure that no ongoing provisions of the contracts have been breached by either party, that no financing terms have been defaulted on, and that neither party has, intentionally or without knowledge, breached any duties or obligations to the other party.

Raich Law PLLC, Your Professional Las Vegas, Nevada Business Lawyers

At Raich Law PLLC, we work closely with our clients – before, during, and after the transaction – to ensure that our clients are positioned for success. We know and understand that we grow when our clients do. The attorneys at Raich Law PLLC in Las Vegas know how to protect our clients with strong and comprehensive contracts when they buy or sell a business in Nevada. For a free consultation, fill out our contact form or call us at (702) 758-4240 and speak to a Nevada Licensed Attorney today!

Welcome back to the Raich Law PLLC blog! Last week we shared some information on the initial talks and negotiations that should take place when selling or buying a business in Nevada in part one of Tips for Buying or Selling a Business in Nevada. Today we’re going to share some information on contracts for selling or buying a business in Nevada. Be sure to check back next week for the third and final part.

Selling or Buying a Business in Nevada Contracts

The most important aspect of selling or buying a business in Nevada is the documentation – the contracts and agreements – of the transaction itself. Such contracts and agreements provide for the terms that the parties have actually agreed to after any negotiations. While most business people realize that contracts need to provide for the agreed-upon terms, many fail to realize that the contracts have to also state any potential terms that the parties might have failed to discuss.

For example, what happens if either party wants to back out of the transaction prior to closing? What happens if one party finds out, after the closing of the transaction, that the other party did not disclose all the relevant liabilities of the business? What happens if the parties have a disagreement prior to or during closing? How can a party protect itself against potential third-party claims on the business? Comprehensive and detailed contracts, such as those that Raich Law PLLC has drafted and continue to draft for our clients, provide answers to all these questions, and many more.

Due to the fact that most attorneys, mediators/arbitrators, and judges look to the written documentation agreed upon to by the parties when making a determination as to the transaction, it is imperative that the document provides for terms that might assist such a decision-maker.

Finally, and perhaps most importantly, effective contracts allow both parties to have peace of mind – while it is obvious, many ineffective contracts can lead a party to worry or stress about potential defaults or breaches.

Raich Law PLLC, Your Professional Las Vegas, Nevada Business Lawyers

It’s the job of the attorneys at Raich Law PLLC in Las Vegas to worry about the deal and the contracts so you don’t have to. For a free consultation, fill out our contact form or call us at (702) 758-4240 and speak to a Nevada Licensed Attorney today!

Happy New Year and welcome to the Raich Law PLLC blog! Today, we’re going to share part one of Tips for Buying or Selling a Business in Nevada. Be sure to check back next week for part two.

Overview About Buying or Selling a Business in Nevada

When buying or selling a business in Nevada, most businessmen and businesswomen know what to look for and discuss – it is common to review a business’ financials, inspect the business’ assets, review the lease terms of the business location, etc. But there are many important considerations when buying or selling a business that either party may not discuss or disclose until it is too late. Many transactions unfortunately turn hostile or even devolve into litigation due to oversight of one of the parties. What are some of these issues and how can they best be dealt with?

Initial Talks and Negotiations When Buying or Selling a Business in Nevada

Those in business often discuss issues about their business and or thoughts of buying or selling a business in Nevada over lunches, while at friends’ houses, or a myriad of other casual settings. Most of the time, such conversations are just general friendly talks without any objectives; however, there are times when such talks turn into potential business offers and at that time, many parties keep discussions going without any contractual agreements or terms.

Many believe documents like a Letter of Intent (LOI) and a Non-Disclosure Agreement (NDA) are just pieces of paper that don’t mean much and often that’s true. When parties deal in good faith and close transactions with proper contracts, they don’t need to rely on any LOIs or NDAs to enforce their rights. But what happens when a deal goes awry? What happens when one party learns everything about another party, decides not to engage in business with that other party, and later competes with the other party using the information it learned in those initial talks and conversations? LOIs and NDAs are necessary for business transactions to protect both sides prior to the divulgence of any sensitive or competitively advantageous information. LOIs and NDAs are like insurance – better to have them and not need them than need them and not have them.

Raich Law PLLC, Your Professional Las Vegas, Nevada Business Lawyers

The attorneys at Raich Law PLLC in Las Vegas have protected many clients with strong and comprehensive LOIs and NDAs and we can protect you and your business as well. For a free consultation, fill out our contact form or call us at (702) 758-4240 and speak to a Nevada Licensed Attorney today!

About Raich Law PLLC

Raich Law PLLC was formed with the purpose of serving businesses and individuals who do or plan to do business in or with companies in the State of Nevada. They are located in Las Vegas, NV and have multiple offices in the city from which to serve you.

Raich Law PLLC’s Managing Partner, Sagar Raich, received his Juris Doctorate degree from the William S. Boyd School of Law at the University of Nevada Las Vegas. Mr. Raich has experience in the fields of business law, real estate law, bankruptcy law, and immigration law. He has also worked in the financial industry and is well versed in that industry and its rules and regulations.

Raich Law PLLC in Las Vegas is a full service Nevada law firm specializing in Business Law, Hedge Fund and Venture Capital Law, Real Estate Law, and more. They offer all types of Business Law services from the more complex like Corporate Formation, American Domestication of Foreign Companies, and Mergers and Acquisitions, to the more basic, like Business Contracts, Independent Contractor Agreements, and more. Their Hedge Fund and Venture Capital Law services include Fund Formation, Fund Regulations, Fund Practices, Fund Purchase/Sale, and more. Their Real Estate Law services include Landlord-Tenant Law, Residential & Commercial Property Transactions, Wills, Trusts, Estates, and more. You can view the full list of services here and you can contact them to set up an appointment or to discuss your existing case here.

Thank you for visiting the new Raich Law PLLC website.

About Raich Law PLLC

Raich Law PLLC is a Las Vegas, Nevada based law firm focusing on the business and personal needs of their clients. From forming business entities to the creation of hedge funds to commercial litigation, they have the ability to serve your legal needs.

Raich Law PLLC was formed with the purpose of serving businesses and individuals who do or plan to do business in or with companies in the State of Nevada. They are located in Las Vegas, NV, and have multiple offices in the city from which to serve you.

The Founder

The Services

Raich Law PLLC in Las Vegas is a full-service Las Vegas, Nevada law firm specializing in Business Law, Hedge Fund and Venture Capital Law, Real Estate Law, and more. They offer all types of Business Law services from the more complex like Corporate Formation, American Domestication of Foreign Companies, and Mergers and Acquisitions, to the more basic, like Business Contracts, Independent Contractor Agreements, and more. Their Hedge Fund and Venture Capital Law services include Fund Formation, Fund Regulations, Fund Practices, Fund Purchase/Sale, and more. Their Real Estate Law services include Landlord-Tenant Law, Residential & Commercial Property Transactions, Wills, Trusts, Estates, and more. You can view the full list of services here and you can contact them to set up an appointment or to discuss your existing case here.

Thank you for visiting the new Raich Law PLLC website.