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IL business lawyerAs any business owner can tell you, running a business means constantly having a lot on your plate. From paying employees to making sure contracts get completed on time, to running inventory and making helpful community connections, the life of a business owner rarely involves downtime. In the hustle and bustle of everyday commerce, it can be easy to lose track of exactly how much a business is worth. How do you know your business’s worth, anyway? Will it depend on who you ask and which method of valuation you use? An Illinois business law attorney can help you answer these questions while ensuring that you have the legal representation you need.

Methods of Valuing Businesses

There are many ways to determine a business’s value. The right one for you will depend on the type of business you own and your goals. For example, determining a business’s value for the sake of securing a loan may be done differently than determining the value for the sake of getting a divorce. The three primary methods of business valuation are:

  • Comparable analysis - Also known as the market value approach, this method compares the value of your business to other similar businesses in the area
  • Asset-based approach - This method calculates a business’s value by comparing the business’s total assets to a business’s total liabilities
  • Earnings approach - This approach assesses a business’s value by determining how much revenue the business has the potential to produce in the future, looking at past earnings, existing contracts, and expected future cash flows
  • Whichever method you use, be prepared to gather extensive documentation on things like:
  • Your business’s reputation
  • Your business’s age
  • Trademarks
  • The uniqueness of the product or service your business offers
  • Past tax filings
  • Employee pay records
  • Expense records and invoices

When Does a Business Owner Need to Assess a Business’s Value?

There are many situations in which a business owner may need to assess the exact value of her business. These include, but are not limited to:

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IL business lawyerMany businesses rely on non-compete agreements to ensure that employees or former employees cannot use a company’s trade secrets or other protected information to engage in unfair competition. These agreements may be included in employment contracts, severance agreements, or other types of contracts, and they may prohibit a person from working for a direct competitor, starting a competing business, or engaging in other competitive activities within a certain geographical area and during a specific time period. However, a recent change to the laws in Illinois may affect a business’s ability to use non-compete agreements in the future. To ensure that they are following the applicable laws, a company can work with a business law attorney to create valid and enforceable non-compete agreements whenever appropriate.

Restrictions on New Non-Compete Agreements

The Illinois Freedom to Work Act was amended in 2021, and the changes went into effect on January 1, 2022. Certain restrictions will apply to non-compete agreements that are created or updated after this date. These restrictions include:

  • Employers can only enter into non-compete agreements with employees that earn more than $75,000 per year. This limit will be increased to $80,000 in 2027, and it will increase by an additional $5,000 in 2032 and 2037.
  • Non-compete agreements are prohibited altogether for people employed in the construction industry or other workers who are covered by a collective bargaining agreement. However, this prohibition does not apply to employees who primarily perform functions related to management, engineering, architectural design, or sales.
  • Employees must receive adequate consideration in return for entering into a non-compete agreement. Consideration may include wages or benefits, bonuses, severance pay, or other forms of compensation. If an employee works for an employer for at least two years after signing a non-compete agreement, this will be considered adequate consideration.
  • To be valid, a non-compete agreement must be necessary to protect an employer’s legitimate business interests. To determine whether the restrictions included in a non-compete agreement are appropriate, multiple factors may be considered, including an employee’s understanding of an employer’s relationships with customers and other employees, an employee’s knowledge of trade secrets or other confidential information, and whether restrictions on when and where an employee can work will be reasonable.
  • Employers are required to advise employees in writing that they should consult with a lawyer before signing a non-compete agreement. Employers must also allow an employee at least 14 days to consider a non-compete agreement before employment begins or before the agreement must be signed.

Contact Our Wheaton Non-Compete Agreement Lawyers

If you believe that non-compete agreements are necessary to protect your business’s interests, you will need to make sure your agreements are in compliance with Illinois law. At Stock, Carlson & Asso. LLC, we can advise you of your rights and the restrictions that may apply to your business, and we will work to draft and negotiate non-compete agreements and other types of contracts that will provide you with the protections you need. Contact our DuPage County business contract attorneys at 630-665-2500 to set up a confidential consultation and learn how we can assist with your legal needs.

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wheaton business lawyerStaying ahead of the competition is a critical factor in a company’s success. While some companies train their employees in unique and strategic manners, others have gained distinct intellectual property. When employees, especially those familiar with these unique properties, leave a company, the business may be subjected to subterfuge. To avoid risking this level of vulnerability, a company may require their employees to sign a covenant to not compete

Defining Covenants to Not Compete

Covenants to Not Compete, more commonly known as Non-Compete Agreements, act as a form of protection for businesses. The agreements prohibit employees from taking a job with a direct competitor within a given amount of time, thus, reducing the chances of the competitor learning of the business’s advantageous practices, including trade secrets and client lists. 

It is not uncommon for non-compete agreements to accompany an employment contract. While requiring new employees to sign such agreements is fairly common in today’s competitive landscape, courts have the authority to invalidate the agreement and leave the employer vulnerable. Collaborating with a business law attorney can help companies ensure that their agreements are both enforceable and adequately protective. 

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Il business lawyerThere are several reasons why contracts are used in business. Contracts are commonly used when a business is formed, when it is sold or purchased, when it buys supplies and goods from other vendors, and when it sells its own goods or services to its customers. A contract spells out what each party should expect to give and to get in a certain situation. For a contract to be enforceable and upheld, it must be valid. There are certain specific elements that a contract must contain in order for it to be considered valid, which is why consulting with a business lawyer is a smart idea when forming or signing a contract.

Elements of a Contract

In the business world, a contract can appear for a variety of reasons. However, not all contracts are enforceable or even valid. When you do business, you should be sure that your contracts are clear and unambiguous to avoid any misunderstandings or confusion. When creating a contract for any reason, the contract should contain:

  • The parties addressed in the agreement - The first element that should be included is the parties that are included in the agreement. If you are creating a sales agreement, you would include your business’s name and your customer’s name, indicating who is the buyer and who is the seller. If you were creating an employment agreement, you would include your business’ name and the name of your employee. This section typically also addresses the “consideration” of the contract or a simple explanation of what the contract is to do for each party.
  • The main purpose and terms of the contract - Next, the meat and potatoes of the contract are included -- the main terms and conditions. Typically, this portion of the contract is extremely detailed and specific. This is where the actions of each party are written out and explain what each party is expected to do. If you are creating a sales contract, you would include the price of the goods or services, a description of those goods, how delivery is to take place, any warranties included with the product, and how payment is to be made.
  • Any additional terms in the contract - You can also include additional terms in a contract that are supplementary to the main terms. Things such as how the contract can be terminated or how disputes arising from the contract can be handled are typically included here.
  • How the contract is to be signed and accepted - Here you can include stipulations as to how the contract must be signed. In some cases, a person may need to sign the contract in the presence of certain people in order for the contract to be valid. In other cases, multiple signatures may be required to ensure the contract is valid.
  • Which state’s laws govern the contract - If you and the person you are entering into the contract with are in different states, it is important that you designate a specific set of laws that govern the contract. State laws are not always the same when it comes to business issues, which is why you should specify how the contract is to be governed.

Our DuPage County Business Contract Lawyers Are Here to Help

At Stock, Carlson & Duff, LLC, we will not only help you create your business contracts, but we can also assist if any disputes arise related to those contracts. Our skilled team of Wheaton, IL business contract attorneys have the experience needed for swift and effective action in any situation. To schedule a consultation, call our office today at 630-665-2500.

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stimulus.jpgThere is no denying that the spread of COVID-19 caused a health and economic crisis throughout the United States. Fortunately, the United States House of Representatives recently passed a $1.9 trillion COVID-19 relief package, which contains $1,400 stimulus checks for individuals (who make up to $75,00 annual gross income), unemployment benefits extension, and billions of dollars in federal aid to help small businesses and non-profit companies. President Biden is expected to sign the bill, and Democrats consider the American Rescue Plan Act of 2021 not just a bill to combat the financial downturn caused by the coronavirus pandemic but also an anti-poverty measure in general.

Financial Assistance for Business Owners

With several brands of vaccines being administered across the country and certain restrictions lifted, the economy has shown signs of rebounding. However, millions of Americans are still unemployed. The American Rescue Plan Act will provide $350 billion to cities and states and $130 billion to schools to aid in reopening them. In addition, the stimulus bill will devote billions more to a national vaccination program, expanded COVID-19 testing, food stamps, and rental assistance, to name a few. As more and more people are vaccinated, non-essential businesses that were temporarily shut down may be allowed to open their doors for customers again. This can include salons, casinos, bars, restaurants, movie theaters, concert venues, as well as other small businesses.

The Act also includes several provisions for small business owners. It allocates an additional $7.25 billion for forgivable loans in the Paycheck Protection Program (PPP). Additionally, it provides grants targeted to small businesses in those areas of the economy that have been hit the hardest by coronavirus-related shutdowns. Specifically, the bill will provide the following in financial relief funds:

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