Breaking Up a For Profit Corporation
A For Profit Corporation can be a useful tool if utilized appropriately. One major problem with a For Profit Corporation is the lack of flexibility to dissolve the Corporation when a disagreement arises between the equity shareholders. If ownership in a For Profit Corporation consists of 50% – 50% split in equity then there may be issues down the road.
Many future circumstances may warrant a dissolution of the For Profit Corporation, such as a dispute on the direction of the business, the profitability of the business, or simply a disagreement regarding employment and management duties. When these disputes arise, it may make the For Profit Corporation untenable and impractical. This can be a problem if one owner of the company wishes to continue business as usual and the other owner wishes to dissolve the corporation.
When making the decision to enter into a For Profit Corporation and splitting equity within the Corporation at a 50/50 ratio please keep in mind a couple of things:
- It will be hard to dissolve the Corporation with a 50/50 split in equity;
- It will cost additional expenses to appoint a receiver to manage the company;
- It will cost additional expenses to retain a lawyer for the purpose of forcibly winding down a For Profit Corporation;
- It will be an uphill battle to dissolve a For Profit Corporation that creates jobs in the community because the policy of Texas Courts’ is to find any alternatives to a dissolution that may bring termination to many employees.
- It will be a complex and time consuming undertaking to dissolve a For Profit Corporation if both equity shareholders do not agree.
Prior to forming a For Profit Corporation, you should research all of your options. Many business organization can provide tax relief and flexibility without the rigidity of a For Profit Corporation. Please seek an experienced attorney when creating or amending any business organization and ask the pros and cons of all business entities.
Children Born Outside of Marriage: Unknown Descendants that May Inherit
Creating a Will is extremely important for individuals that have a sizable estate in the Dallas and DFW metroplex. Time and time again, individuals refuse to properly prepare for death and do not see the proper preparation of a legal and valid will as a necessity.
When you refuse to prepare a Will, then your entire estate will pass through the intestate process. Intestate rules apply if: (1) there is no will, (2) the will does not completely dispose of the entire estate, or (3) there is a pretermitted child/adopted child born after the will’s execution.
In certain situations, a child born outside of a marriage may still claim inheritance rights per the rules of Intestate succession. Nonmarital children may establish inheritance rights from the alleged father if the presumption of paternity is proven in court. Paternity is presumed if one of the following elements are met per Tex. Fam. Code § 160.204:
- The child was born during (or within 300 days after) the marriage of the man and the child’s mother;
- During the first two years of the child’s life, the man continuously resided in the same household as the child and represented to others that the child was his; or
- The parties married after the Child’s birth and the man voluntarily asserted his paternity of the child in one of the following ways:
a) The assertion of paternity is in a record filed with the Bureau of Vital Statistics;
b) The man was voluntarily named as the Child’s father on the birth certificate; or
c) The man promised in a record to support the child as his own.In many cases a child that was born out of wedlock may still inherit from the father’s estate if the above mentioned actions can be proved. Depending on the estate, this ability to prove the presumption of paternity can have a great impact on the allocation of the estate’s assets.
Paternity may be rebutted, even if the presumption is proved by a preponderance of evidence, by a DNA test. DNA testing is the only option to rebut the presumption of paternity. Depending on the estate and the desires of all parties involved, a Judge may order that the body be dug up for a DNA sample of the deceased. This is rare, but the Court does have the authority.
It is important to remember that the Statute of Limitations to establish inheritance rights or the presumption of paternity begins at the date in which the father died. The statute of limitations is four years, which means any potential claim must be brought within four years of the individual’s death.
If you are a nonmarital child or born out of wedlock in the DFW area, you may still inherit as a matter of law. A will created prior to the birth of a nonmarital child will not cut off the child from his or her rightful inheritance. For situations like this, please contact Nacol Law Firm to acquire an experienced attorney to navigate through intestacy laws and probate.
Julian Nacol
Dallas Probate Attorney
Nacol Law Firm P.C.
tel: (972) 690-3333
Children Born Outside of Marriage: Unknown Descendants that May Inherit
Creating a Will is extremely important for individuals that have a sizable estate in the Dallas and DFW metroplex. Time and time again, individuals refuse to properly prepare for death and do not see the proper preparation of a legal and valid will as a necessity.
When you refuse to prepare a Will, then your entire estate will pass through the intestate process. Intestate rules apply if: (1) there is no will, (2) the will does not completely dispose of the entire estate, or (3) there is a pretermitted child/adopted child born after the will’s execution.
In certain situations, a child born outside of a marriage may still claim inheritance rights per the rules of Intestate succession. Nonmarital children may establish inheritance rights from the alleged father if the presumption of paternity is proven in court. Paternity is presumed if one of the following elements are met per Tex. Fam. Code § 160.204:
- The child was born during (or within 300 days after) the marriage of the man and the child’s mother;
- During the first two years of the child’s life, the man continuously resided in the same household as the child and represented to others that the child was his; or
- The parties married after the Child’s birth and the man voluntarily asserted his paternity of the child in one of the following ways:
a) The assertion of paternity is in a record filed with the Bureau of Vital Statistics;
b) The man was voluntarily named as the Child’s father on the birth certificate; or
c) The man promised in a record to support the child as his own.In many cases a child that was born out of wedlock may still inherit from the father’s estate if the above mentioned actions can be proved. Depending on the estate, this ability to prove the presumption of paternity can have a great impact on the allocation of the estate’s assets.
Paternity may be rebutted, even if the presumption is proved by a preponderance of evidence, by a DNA test. DNA testing is the only option to rebut the presumption of paternity. Depending on the estate and the desires of all parties involved, a Judge may order that the body be dug up for a DNA sample of the deceased. This is rare, but the Court does have the authority.
It is important to remember that the Statute of Limitations to establish inheritance rights or the presumption of paternity begins at the date in which the father died. The statute of limitations is four years, which means any potential claim must be brought within four years of the individual’s death.
If you are a nonmarital child or born out of wedlock in the DFW area, you may still inherit as a matter of law. A will created prior to the birth of a nonmarital child will not cut off the child from his or her rightful inheritance. For situations like this, please contact Nacol Law Firm to acquire an experienced attorney to navigate through intestacy laws and probate.
Julian Nacol
Dallas Probate Attorney
Nacol Law Firm P.C.
tel: (972) 690-3333
Verbal Contracts and Texas Law
Verbal Contracts do exist and are legally enforceable in Texas, as a matter of law, if they meet necessary legal requirements and specificity. Adequate consideration must be given between the two parties of a verbal contract to make it binding. Adequate consideration is defined in two ways: (1) having a mutual reciprocal exchange [bargained for exchange] or (2) having legal value [an individual must do something that he is not legally obligated to do]. If adequate consideration is given between both parties and all other legal requirements are met, then a verbal contract may be held valid in a court of law.
Verbal contracts are also limited by the Statute of Frauds. The Statute of Frauds requires certain types of contracts to only be in writing purportedly to avoid defrauding citizens.
The following must be in writing:
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(1) Making a will or Trust
(2) A contract to answer for the duty of another (Guarantee/Suretyship)
(3) Marriage (exception common law marriage)
(4) Sale and contracts affecting Land
(5) A contract that lasts longer than 1 year from the time it is made and which cannot be performed in one year
(6) Any sale of goods for a price of $500 or more
(7) Sales of securities
Verbal contracts in Texas have limitations. Let’s say that a contractor wanted to paint the outside of your house. You decide to pay the contractor seven thousand to paint the outside of the house and the job will take approximately 3-8 weeks. If you have a verbal contract with the painter and pay him this could be legally enforceable in a court of law. The verbal contract with the painter is not invalidated by any provision set above in the Statute of fraud. It is a contract for service, under one year, and adequate consideration has been given with the payment of seven thousand dollars.
Here is another example of a verbal contract that will not be upheld in a court of law. An individual buys fifty acres from his neighbor for fifty thousand dollars under a verbal contract. Before the fifty thousand dollars is exchanged, the neighbor decides to pull out of the deal. This verbal contract would not be enforceable in court and the buyer cannot enforce the contract because it deals with real estate (land). This is one of the specific types of contracts that must be in writing because of the Statute of Frauds. The individual may get his money back but the point is he cannot enforce the contract since it is not in writing.
The best course of action in the litigious world we live in is to cover your tracks by securing a written contract in almost all circumstances. Do not rely on the limited options that allow a verbal contract to be enforced because in court you will have to deal with the “He said, she said” testimony and incur significant cost of litigation unnecessarily.
Holding an Inspector Accountable When Purchasing a Home
The housing market has exploded in the Dallas / Ft. Worth area in the last several years through the move of many companies to relocation national/regional headquarters to Texas. New jobs have created an explosion in the DFW housing market bringing in many potential buyers. A nice home in a good neighborhood may last only a couple of days before it is sold.
Potential buyers must be prepared when purchasing a home in the Lone Star State. After the initial offer, it is customary to have 8-12 days for a potential buyer to have the prospective home inspected by an independent third party. During this time, it is important to find an inspector that you trust.
If the home inspector performs a negligent inspection or misrepresents the condition of a part or a defect in the home that causes expensive problems for the buyer, the inspector may be liable. The Texas Deceptive Trade Practices Act (DTPA) will protect a buyer from the misrepresentation of an independent inspector. Under the DTPA per Tex. Bus. & Comm. Code §§ 17.46(b) there are multiple causes of action to insure your protection if an inspector committed an action that:
(a) represented that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another;
(b) causing confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods or services;
(c) causing confusion or misunderstanding as to affiliation, connection, or association with, or certification by, another;
(e) representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which he does not;
(f) representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another;
(g) knowingly making false or misleading statements of fact about the need for parts, replacements, or repair service;
(h) falsely representing that work or services have been performed on or parts replaced in goods; and
(i) failing to disclose information concerning goods or services which was known at the time of the transaction if such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed;
These are some of the causes of actions that can be filed against a home inspector that misrepresented a portion of the home that had a severe defect. DTPA actions can be complex and intricate both in filling the action and in litigation of the case. An experienced real estate attorney is needed if you wish to pursue a remedy.
Julian Nacol, Attorney
Nacol Law Firm P.C.
NACOL LAW FIRM P.C.
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Dallas, Texas 75231
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Attorney Mark A. Nacol is board certified in Civil Trial Law by the Texas Board of Legal Specialization