Small businesses are the heart of the American economy. They are truly the places where dreams become realized as they instill a sense of community and inspiration to the cities and towns in which they operate. Sadly, the COVID-19 pandemic has forever impacted the small business landscape, despite the economic stimulus programs Congress has created in an attempt to keep them afloat. Many are left worrying and wondering: Should I close my small business?
Twin Cities Small Business Attorney
Small businesses are facing significant hardship during these troubled times. No matter what kind of shape your business and finances are in, an attorney can help review your situation and help provide you with options as you move forward. These options can help save you time, money, and further stress.
MLG Bankruptcy’s Edina law firm offers Minnesotans 65 years of combined experience throughout the Twin Cities and surrounding areas. The firm has a reputation for diligence, affordability, honesty – and a high success rate. Our Edina attorneys provide large legal resources and assistance with a personal touch. We understand your needs, because we are local, too. For more information or to arrange a free consultation, call us today at 952.841.9000 or visit mlgbankruptcy.com.
Options for Struggling Small Businesses
Every small business is different, and each situation is unique. Local shops, restaurants, salons, and other small businesses have different options that an attorney can review. Here are a few:
Negotiate. Having an attorney representing you will bring your Landlord to the table and better apply your rights in regard to any lease agreements or other contracts you might be a part of. Our attorneys have extensive commercial lease negotiation experience, pre and post signing. Contact us today to review your contracts and assess what arguments you might have to modify the terms to better serve your business during this time.
Close. More than 100,000 U.S. small businesses have had shut their doors as of the middle of May. Closing a business can be complicated; there is more to closing down your company than simply stopping work and leaving. The U.S. Small Business Administration recommends small business owners have an attorney help them with the steps, paperwork, and legal requirements, which can include:
- Make a decision to close. Sole proprietors can decide to close without approval from anyone else. Partnerships, however, require all co-owners to agree.
- File dissolution documents. Failure to legally dissolve an LLC or corporation with the state of Minnesota will lead to ongoing taxes and filing requirements.
- Cancel registrations, permits, licenses, and business names to protect your reputation and your finances.
- Comply with employment and labor laws. This is important also to your reputation and finances. The federal Worker Adjustment and Retraining Notification Act (WARN) offers guidelines for employee payment after closing, along with other federal and state laws.
- Resolve financial obligations. Take care of final returns for income tax and sales tax. Cancel your Employer Identification Number, notify federal and state tax agencies.
- Maintain tax and employment records for at least three to seven years.
Sell. If your business was profitable before the pandemic, you might consider selling it to make back some of the money you lost in the last few months. However, you need to determine how much your business is worth, and an attorney can help. The SBA recommends that you and your attorney consider the following valuation terms:
- Income approach, including projected revenue and accounts for potential risks.
- Market approach, which compares your business to other similar businesses in the Twin Cities that have recently sold. This is similar to home valuations, which compares similar houses and properties in a community.
- Assets approach, which subtracts total business liabilities from the total value of all assets.
You and your attorney also will need to draft a solid sales agreement that you and a potential buyer will sign before any money is exchanged. Such contracts can be tricky, so it’s best to have an attorney draft and review it to ensure your rights are protected.
Commercial Loan Modification. Typically, in order to get a business loan modification, you must have an attorney work directly with your lender to negotiate new terms that are comfortable with both sides. A loan modification can help you get back on your feet instead of closing or selling. At attorney will help you:
- Provide all required paperwork, including a financial statement, proof of income, most recent tax returns, bank statements, and a hardship statement to the servicer for evaluation;
- Show that you can’t make your current mortgage payment due to a financial hardship; and
- Complete a trial period to demonstrate you can afford the new monthly amount.
There are usually several lender guidelines that must also be met, which can often be complicated, but the real estate attorney at Morris Law Group can help you navigate this process with ease.
Business Bankruptcy. Our legal team helps Minnesotans across the Twin Cities save their businesses and homes, reorganize their debt, and plan for a stronger future. Chapter 11 is a form of bankruptcy that involves a reorganization of a business’ affairs, debts, and assets. The terms are subject to the business owners’ fulfillment of his obligations under the plan of reorganization. Chapter 11 is complex, however, in most cases, a business in Chapter 11 can continue operations. It’s important to have an experienced business bankruptcy lawyer guiding you through the process.
No matter what you decide – or if you are having trouble deciding what to do – we can help. Visit our website or call 952.841.9000 to schedule a free consultation today. You also can fill out our confidential contact form.
About Morris Law Group
Integrity and trust is the foundation of our practice. Our passion for client success is matched only by our experience, our reputation for excellence, and our deep understanding of each and every client’s individual needs.
At Morris Law Group, we don’t just counsel our clients. We invest in them.
We’ve been serving the Edina and Twin Cities communities since 2002. Our attorneys provide personalized legal services to clients seeking help in real estate, business development, commercial litigation, and other matters.
Our Edina attorneys experienced in these areas – Bethany Danner and Linda Thompson – believe that relationships matter, whether a client is trying to navigate a purchase agreement, get a business off the ground, or dissolve a partnership.
MLG Bankruptcy is the best Minnesota law firm for all of your debt relief needs. We advocate for our clients with professionalism, empathy, and with a results-driven approach.
Let’s get started today. For more information or to book a free consultation, call 952.841.9000 or fill out our contact form here.