Planning Well in Advance of a Transaction

From a tax and estate planning perspective, the most valuable opportunities often arise well before a business is formally brought to market. Early planning allows business owners to take advantage of strategies that may no longer be available once a transaction becomes imminent.

One key consideration is ownership structuring. Reviewing how the business is held, whether individually, through entities, or in trust, can uncover opportunities to improve tax efficiency and facilitate wealth transfer. For example, transferring minority interests in a business to irrevocable trusts for family members, when valuations are lower and before a sale is anticipated, may reduce future estate tax exposure. These strategies, often referred to as “pre-sale gifting,” can allow appreciation to occur outside of the owner’s taxable estate.

Trust planning also plays an important role. Properly structured trusts can provide asset protection, centralized management, and multigenerational wealth planning benefits. However, timing is critical. Once a letter of intent is signed or a sale becomes highly probable, the IRS may scrutinize transfers more closely, potentially limiting the effectiveness of these strategies.

From the deal side, “early” really means early. By the time a letter of intent is signed, the framework of the transaction is often set, and leverage begins to shift. Preparing in advance—cleaning up corporate records, evaluating contracts, and aligning ownership—can prevent delays and preserve negotiating strength.

Just as importantly, early coordination with tax counsel ensures that the business is positioned in a way that supports both marketability and tax efficiency. Buyers will conduct extensive diligence, and a well-prepared seller is better equipped to maintain momentum, avoid surprises, and command stronger terms.

Planning During the Transaction

Once a transaction is underway, the process moves quickly and becomes highly structured. Negotiations typically focus on key terms such as purchase price, representations and warranties, indemnification, and, critically, deal structure.

One of the most significant structural decisions is whether the sale will be an asset purchase or a stock purchase. Buyers often prefer asset deals for liability protection and tax benefits, while sellers frequently favor stock deals for cleaner exits and capital gains treatment. Navigating this tension is a central part of the negotiation process.

In addition, deal mechanics such as earnouts, rollover equity, and escrow arrangements can materially impact both risk allocation and overall value. These terms should be evaluated not only from a legal perspective, but also in light of their tax consequences.

That’s where tax planning continues to play a critical role during the deal itself. The structure of the transaction directly affects how proceeds are taxed, and careful analysis can help align the interests of both buyer and seller.

For example, in an asset sale, buyers may receive a step-up in tax basis, which can be highly valuable. However, sellers (particularly C corporations) may face double taxation. In a stock sale, sellers often achieve more favorable capital gains treatment, though buyers may be wary of inheriting liabilities.

Tax elections can sometimes bridge this gap. Certain elections allow the parties to achieve a hybrid result; providing buyers with basis step-up benefits while preserving favorable tax treatment for sellers. These opportunities require proactive analysis and close coordination with deal counsel.

A Coordinated Approach Delivers Better Outcomes

A successful transaction is not just about getting to closing—it’s about getting there efficiently, with minimal disruption and maximum value; and making sure you actually keep that value when it’s all said and done.

Together, a coordinated team of advisors can align transaction execution with tax efficiency and long-term wealth planning. Business owners who engage counsel early (and maintain that collaboration throughout the process) are best positioned to achieve a successful and well-planned exit.

For those considering a future sale, the takeaway is clear: start planning early, stay engaged throughout the process, and ensure your advisors are working together every step of the way.

For more information or to seek counsel from our Business & Corporate or Taxation practice groups, please reach out to request a consultation or call us at 216-696-1422.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

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Small Business Ownership can be incredibly rewarding. Few people know the satisfaction of growing something from nothing like a small business owner. There’s a certain satisfaction that comes from knowing that your success is the result of your own industriousness, ingenuity, or specialized expertise. 

We often hear from small business clients who are in the grind of “trying to do it all,” and they feel overwhelmed by the legal issues that touch their businesses. They often don’t have the time to proactively address the legal issues every business faces – from employment law compliance and drafting contracts to financing and succession planning. That’s why our approach is rooted in a simple truth: We get it. We really do. Because we’re a small business too.

We Know the Value of Every Dollar

At McCarthy Lebit, there’s a saying: “For our small business clients, every dollar they spend with us is a dollar that’s not in their pocket at the end of the year.” That mindset, inspired by Ken Liffman, guides our client interactions.  

When we provide legal advice, we’re always thinking about the return on your investment. We understand that every dollar counts and that legal services must enhance your business goals. We never want our clients to hesitate to involve us; we should be viewed as a resource, not a drain on resources. We accomplish this through practical, solution-oriented advice guided by your business’s unique goals and challenges. While some complex legal problems cannot be avoided, we are always mindful of the burden these situations place on our clients, and our lawyers work to deliver a great result that is pragmatic and as economical as possible.

We Move at Your Speed

Small businesses need responsive partners. When issues arise, you can’t afford to wait a week for a call back. As a mid-sized firm with small business in our DNA, we prioritize accessibility, clear communication, and timely answers. We know the importance of being available and nimble. 

We Understand Growth

Many of our clients are in growth mode – whether through mergers and acquisitions, adding talent, entering into real estate transactions, or raising capital. We’ve been there, and we, too, have grown deliberately over time. Our own experience, along with the insight we’ve gained from representing thousands of growing small businesses, informs how we counsel our clients through these transitions. 

Strategic. Proactive. Prepared.

Often, our clients involve us when problems arise, and in those instances, we are tenacious advocates, marshaling our years of litigation and dispute resolution experience. For our small business clients, though, our value isn’t just about solving problems after they arise. It’s about helping you build a business that’s resilient, well-structured, and positioned to grow and thrive.

If you’re a small business owner looking for a legal partner who truly understands your world, let’s talk. Reach out to request a consultation or call us at 216-696-1422.

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In celebration of National Small Business Month, we proudly recognize the contributions of small businesses in our community. McCarthy Lebit is committed to supporting entrepreneurs and business owners with trusted legal guidance through every stage of their journey, from formation to growth and beyond. As a law firm deeply connected to the small business community, we’re proud to serve as trusted advisors and advocates for business owners throughout the region.

This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

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The Importance of Title & Survey Review

A review of a title commitment confirms the seller owns the property and has the legal right to sell it. Without this confirmation, buyers can inherit undisclosed liens, outdated mortgages, restrictive covenants, easements, or unresolved ownership claims. Any of these issues can delay closing, reduce the value of the property, and create legal disputes.

Survey review is equally as important as title review, and the two go hand-in-hand. A survey reveals the property’s physical boundaries and identifies easements, encroachments, setbacks, and other conditions that impact land use. These issues may be detailed on the title commitment but are often misunderstood until they are revealed by a current survey of the property.

Title insurance also plays a major role. A clean title is usually a prerequisite for a title insurance policy, which protects against future claims or undiscovered issues. Further, most commercial lenders will not fund a transaction without it.

A Real Estate Lawyer’s Role in the Title & Survey Review Process

Real estate lawyers serve as both legal translators and risk managers in the title and survey review process. On the title side, they examine the title commitment issued by the title company, flag concerning exceptions, and negotiate their removal or mitigation. Lawyers will also ensure that the property title complies with the representations and warranties in the purchase agreement.

When it comes to the survey, it is cross-referenced with the title documents to identify any conflicts, encroachments, or unrecorded easements. The analysis focuses on how the property’s physical and legal boundaries could affect intended use, such as future expansion plans, parking layout, compliance with local zoning regulations, or more.

Beyond identifying issues, the goal of a real estate attorney is to help mitigate risk. This may involve recommending specific endorsements to the title policy, drafting or revising agreements, or coordinating with the title company, engineers, and lenders to resolve issues before closing. It is also essential to ensure the proper issuance and recording of deeds and other legal documents.

Small Business, Big Stakes

Small business owners often invest their personal savings and take significant risks when acquiring property. That is specifically why due diligence in commercial real estate transactions is not just for major corporations. It is even more crucial when the stakes are personal, margins are tighter, and an owner stands to lose everything. This makes careful legal diligence not a luxury for small businesses, but a necessity.

If you are buying, leasing, or developing property, a real estate attorney can help you uncover hidden risks, negotiate protections, and close with clarity and peace of mind.

To seek counsel from our Real Estate & Construction group, please reach out to request a consultation or call us at 216-696-1422

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In celebration of National Small Business Month, we proudly recognize the contributions of small businesses in our community. McCarthy Lebit is committed to supporting entrepreneurs and business owners with trusted legal guidance through every stage of their journey, from formation to growth and beyond. As a law firm deeply connected to the small business community, we’re proud to serve as trusted advisors and advocates for business owners throughout the region.

This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

The post Title & Survey Review: The Hidden Commercial Real Estate Safeguard appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

Going to Market: Pros & Cons

The classic example of family business planning is going to market, or preparing for a sale or transition to new ownership. On one hand, sales of closely-held businesses are influenced by latent issues of valuation, financing, and other potential pitfalls. On the other hand, a sale provides a direct injection of liquidity, unlocking wealth and helping owners transition into another phase of life. A sale may be best for those who want to get out of a business and pursue new endeavors.

The business could also continue operating in the family — even without the daily operations of legacy owners. The power of restructuring allows legacy owners to step back from the day-to-day, remain involved, and add flexibility. Restructuring is an option for businesses with a strong management team that can continue profitable operations.

Customizing Your Transition

Transitioning the family business takes many forms. Advisers have a diverse set of tools and strategies to customize succession plans for different businesses. By keeping an eye toward tax, business and corporate considerations, they assist business owners in navigating the complexities of such changes. Transitioning could be from legacy owners to current management, intra-family or even a hybrid — all bearing unique considerations. Transitioning the business may be best for those owners looking to pass an income-producing asset onto future generations.

Navigating Your Options

Succession planning for the family business takes one of three main forms — selling, holding, or transitioning the business. In all circumstances, legacy owners can guard their visions with creative, yet comprehensive planning to keep their assets running in tip-top shape.

To seek counsel from our Business & Corporate group, please reach out to request a consultation or call us at 216-696-1422.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

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First, you will want to review the ordinances – these can usually be found online through the municipality’s website. The ordinance should often include the procedure for zoning permit applications, as well as for appeals and variances. Second, you will want to look at the municipality’s zoning map, which should also be accessible online – if not, call your local municipality and have them provide you with the appropriate documentation.

When reviewing the ordinance and zoning map, consider which uses are permitted in your business’s proposed location. Most maps are divided between residential and commercial uses. Often times, these maps will also include mix-use zones, as well as other uses such as agricultural or historic zones. And, frequently, certain businesses are only conditionally permitted in a zoning district. That is, the business will need to satisfy certain requirements before the permit will be granted. For example, a liquor store may be permitted in a certain zone, but only if it is 1,000 feet from a school.

Then, it is time to begin filling out the permit application. While many applications are relatively straightforward, it is important to enlist the help of an attorney to review the application before submission. The details you provide in the application can make-or-break your chances of the permit being granted.

If you are seeking a variance, you may be asked to appear before your local planning commission. At the meeting, you or your attorney will give a presentation explaining your permit application. Then, you may be asked to field questions from members of the planning commission, after which they will render a decision. If they deny your permit, there is a legal process for appealing that decision.

But what if you think that the zoning code or the denial of your permit is unreasonable, unconstitutional, or otherwise improper? To better understand what a municipality can and cannot do when deciding to grant or deny your permit application, it is helpful to recap a brief history of zoning laws.

Zoning laws in America have deep ties to Northeast Ohio. In the early 20th Century, Cleveland was a booming industrial hub. The growth of the industrial sector was so precipitous, in fact, that it threatened to envelope surrounding residential communities. To combat this challenge, the Village of Euclid established a comprehensive zoning plan that regulated where certain industries and residential structures could be located. One landowner argued that the zoning plan was unconstitutional because it diminished property values by prohibiting the land from being developed for industrial purposes. This prompted a seminal case in zoning law: Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926).

The Supreme Court, in addressing the relatively new concept of zoning, held that the zoning plan was a reasonable and constitutional of the Village of Euclid’s police power. The zoning plan was not arbitrary, and it had a rational relation to the health and safety of the community.

Much has changed since the Supreme Court decided Euclid v. Ambler in 1926 – new industries; new understandings of public health and safety; and more developments in zoning law. The essence of Euclid v. Ambler, however, remains largely intact. To pass constitutional muster, a zoning ordinance cannot be unreasonable or arbitrarily enforced and must have a substantial relation to the public health, safety, morals, or general welfare of the community.

In conclusion, understanding and complying with local zoning ordinances is essential for business owners. Failure to adhere to these regulations can lead to significant consequences, including legal penalties and disruptions to business operations. By becoming familiar with local zoning codes, seeking legal guidance, and proactively addressing compliance issues, individuals can ensure a smoother process for setting up or expanding their businesses. Navigating local zoning ordinances is not just about avoiding trouble—it’s about laying the groundwork for long-term success and sustainability.

For more information or to seek counsel from our Real Estate & Construction attorneys, please reach out to request a consultation or call us at 216-696-1422.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

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Shareholder agreements, which include close corporation agreements, operating agreements, and buy sell agreements, are an important part of any business strategy, providing a framework for sound governance and preventing misunderstandings that may result in litigation.

Close Corporation Agreements

A close corporation agreement, often referred to as a “shareholders’ agreement,” is a legal document that outlines the business’ ownership structure, management, and day-to-day operations. An operating agreement for limited liability companies functions in the same way. A well-crafted close corporation agreement or operating agreement will include mechanisms for decision-making, capital calls, voting rights, winding up and dissolving the entity, and dispute resolution.

Buyout Agreements

A buy-sell agreement, or “buyout agreement,” outlines the terms and conditions for the sale or transfer of shareholder or member equity. Buy-sell agreements may include an agreed upon formula, or a certificate of valuation, for a buy-out of one shareholder or member’s interest. Regardless of the buyout mechanism, it should be understood by all parties, with input from business valuation experts, accountants, and legal counsel. The buy-out mechanism should also be reviewed yearly to ensure it is up to date. Buy-sell agreements may also include rights of first refusal, call options, put options and drag along rights.

Having both a close corporation agreement and buy-sell agreement in place provides numerous benefits to the company and its shareholders or members. They create a framework for sound governance and dispute resolution, facilitate transparent business practices and common understandings, and prepare for the smooth transfer of ownership interest.

While incorporating these agreements into the family business plan would seem like a no-brainer, many closely held businesses operate without them, or with outdated agreements, which risks feuding, financial losses, and lawsuits.

Regular Review

Beyond having these contractual arrangements in place, shareholder or member agreements should be reviewed and updated frequently, especially as your company grows. Purchase price mechanisms should be assessed periodically to ensure that compensation paid upon the death, disability or departure of a shareholder or member is understood and fair to all parties. And life insurance should be maintained to fund a buyout of another shareholder or member’s interest and to fund ongoing business operations.

By referencing and incorporating legal tools and best practices, family run businesses can create a long-lasting foundation for their company’s ongoing success, now and in the future.

For more information or to seek counsel from our team of litigation attorneys, please reach out to request a consultation or call us at 216-696-1422.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

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Accommodating Employees Generally

A “reasonable accommodation” is a modification to the way a job is performed that allows a person with a disability to complete his or her job. 

Under the Americans with Disabilities Act (the “ADA”), employers must provide reasonable accommodations to employees with disabilities.  Similarly, under the Pregnant Workers Fairness Act (the “PWFA”), employers are required to provide reasonable accommodations for employees with limitations related to pregnancy, childbirth, and related medical conditions.

However, employers are not required to make reasonable accommodations if doing so would create an “undue hardship” on the business.  Whether an undue hardship exists is determined on a case-by-case basis and can depend on the nature and cost of the accommodation in relation to the employer’s size and resources.  Courts generally look to several relevant factors in determining whether an accommodation would impose an undue hardship, including:

• The nature and cost of the accommodation;
• The employer’s financial resources;
• The number of persons employed in the workplace; and
• The accommodation’s effect on the employer’s expenses/resources.

Before simply denying an employee’s request for accommodation, though, employers must engage in an “interactive process.”  In other words, even if the employee’s requested accommodation is unreasonable—or even if it would present an undue hardship—the employer is required to engage in an open conversation with the employee to determine whether an alternative accommodation can be identified.

Service Animals in Restaurants

The ADA is broken into several parts. Title I of the ADA requires employers, as noted above, to make certain accommodations for their employees. Title III, on the other hand, requires places of public accommodation to be designed in compliance with accessibility standards. Title III of the ADA explicitly discusses the concept of service animals: it defines service animals as “dogs that are individually trained to do work or perform tasks for people with disabilities,” and members of the public who use a service animal are generally permitted to take their animal into areas of a business where the public is permitted to go.

Whether a disabled employee is entitled to an animal in the workplace, however, presents a more challenging issue.  Unlike Title III, Title I of the ADA (which deals with accommodations for employees) does not expressly discuss service animals.  Legal guidance on the issue is very limited, and the guidance that does exist does not present a one-size-fits-all solution.  It, instead, acknowledges that an employees’ entitlement to accommodation depends on fact-specific circumstances. The use of service animals by restaurant employees thus depends upon whether the request is reasonable and whether it presents an undue hardship on the employer.

In the restaurant setting, employers must be particularly concerned about the cleanliness of their business and the safety of their patrons and workers.  For these reasons, if one employee’s request for a service animal creates an allergy risk for others—and if an employer cannot modify the employee’s workspace to eliminate that risk—the employee might not be entitled to the accommodation.  Rather, the accommodation may be considered unreasonable and may impose an undue hardship on the employer.   

Obligations to New Mothers

Several laws offer protection to new/expecting mothers in the workplace. For example, Title VII of the Civil Rights Act of 1964 protects employees against discrimination and prejudice in the hiring and firing of employees on the basis of pregnancy; the ADA protects employees who suffer from pregnancy-related disabilities; and the PWFA builds on the ADA by protecting employees who have known limitations related to pregnancy and childbirth (which might include post-childbirth recovery, cesarean sections, changes in hormone levels, etc.).  Notably, the PUMP Act—which became law in December of last year—also requires employers to provide employees with an area (other than a bathroom) to express breast milk at work, which must be functional for pumping milk, shielded from view, free from intrusion, and available as needed.

The Ohio Department of Health (the “ODH”) has issued guidance specifically designed to help restaurant owners provide lactation accommodations to breastfeeding employees.  According to the ODH’s guidance, “[r]estaurants have found many creative solutions to accommodate breastfeeding employees,” and “[e]ven small restaurants and fast-food industries with limited space and rigid time schedules can make it work.”

Among other solutions, the ODH suggests that restaurants can effectively accommodate breastfeeding employees by creating a private space (with partitions/privacy screens) in an employee break area or by making an office area available (so long as the office is free from surveillance).

Balancing Employees’ Needs With Patrons’ Safety

While restaurant owners sometimes have obligations to accommodate disabled employees, they also have obligations to the public and to their patrons.  Sometimes, for example, an employee may have a health concern—like an infectious disease—that may prevent the employee from safely handling food and/or interacting with diners.

For this reason, restaurants should consider developing sick worker policies to help prevent the transmission of foodborne illness or communicable diseases. When employees are suffering from certain symptoms (e.g., diarrhea, vomiting, fever), an effective sick worker policy might require employees to self-report their illness to a supervisor and to stay home from work until the symptoms pass.

Although this article identifies a few legal issues that restaurant owners may encounter, it does not constitute legal advice, nor does it anticipate all legal questions that may arise in the workplace. Adequately accommodating employees requires careful compliance with state and federal laws, and employers are advised to seek legal counsel when they develop specific legal concerns.

To seek counsel from our Hospitality & Liquor Law practice group, please reach out to request a consultation or call us at 216-696-1422.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

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Navigating Asset Transactions

Asset transactions have unique contours when compared against a stock deal. From the buy-side, buyers may depreciate assets based on purchase price. However, the downside is business successor liability. Under state law, buying assets may keep the buyer on the hook for unpaid state taxes. From the sell-side, asset sales likely create capital gain treatment. This is beneficial because of the capital gain rate break. However, sellers of assets may have potential “depreciation recapture.” To reiterate, it is crucial to emphasize that seasoned advisers, armed with extensive expertise, possess a range of potential planning opportunities designed to proactively mitigate and address the various tax risks inherent in such transactions.

Deciphering Complexity of Stock Sales

Stock sales, compared to asset deals, are generally more complex. Depending on the business entity form, the Code blesses some transaction structures as tax-free. On the one hand, buyers may choose stock deals for “tax-free reorganization treatment.” A tax-free reorganization is a creature of the Code and requires tax counsel. Sellers generally receive capital gain treatment on the sale of corporate stock. All in all, stock deals are complex, but advisers have levers in the Code to manage parties’ interest in a transaction.

Engaging an Expert for Strategic Deal Structuring

Before inking a letter of intent, engaging a skilled adviser to structure your deal ensures the most value is captured at the bargaining table. Advisers with both tax and transaction acumen have tools in their toolkit to bring a transaction to life while mitigating downstream tax liabilities. These experienced professionals not only navigate the complexities of deal structuring but also assess potential risks and opportunities, providing comprehensive guidance to optimize the overall outcome of the transaction.

For more information or to seek counsel from McCarthy Lebit’s Mergers & Acquisitions attorneys, please reach out to request a consultation or call us at 216-696-1422.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

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Often, selecting an entity structure is an afterthought. But, selecting an inappropriate entity structure can potentially result in substantial expenses to the business down the line, as the initial structure may not be the most advantageous. Individuals interested in starting a new business would be wise to work with legal counsel to properly structure the business at the outset, as there are many different entity structures that provide vastly different benefits, especially in regard to taxes and liability. Some of the most popular business entity structures include the following:

Sole Proprietorship

An individual that conducts business activities without officially forming a business entity with a Secretary of State or similar office, is presumed to be a sole proprietorship. Predictably, a sole proprietorship carries the lowest business formation expenses, but individuals considering this entity structure should understand that they are personally liable for the debts, obligations, and liabilities of the business. A sole proprietorship’s income or losses are reported on Schedule C of the owner’s personal tax return.

Partnership

Any two or more individuals or entities that co-own a business may structure the business entity as a partnership, of which there are a variety, including general partnerships, limited partnerships, and limited liability partnerships, to name a few. All the partners in a general partnership and the general partners in a limited partnership are responsible for the debts, obligations and liabilities of the business, while the limited partners in a limited partnership and all the partners in a limited liability partnership have “limited liability” (i.e., liability is limited to investment in the business). Partnerships, by default, are subject to pass-through taxation, meaning a partnership’s income or losses are reported on the personal tax returns of the individual partners.

Corporation

A corporation is a legal entity separate and distinct from its owners (one or more), called shareholders, that provides each shareholder with limited liability. Traditional C-corporations are subject to “double-taxation,” because the income of a C-corporation is first taxed to the corporation, and then again when that same income is distributed to shareholders in the form of a dividend. Shareholders must report dividends received on their personal tax returns. For tax purposes, certain eligible corporations may elect to be taxed as an S-corporation. The primary benefit of an S-corporation is the removal of Federal income tax at the corporate level, but S-corporations must be carefully structured and operated to maintain S-corporation status, and the state-tax benefits provided by an S-corporation vary from state to state. The obligation to follow “corporate formalities” generally results in corporations incurring higher formation and record-keeping expenses than other entity structures.

Limited Liability Company (“LLC”)

The most common new entity being formed is the LLC. LLCs provide one or more owners, called members, with the limited liability of a corporation, and the pass-through taxation of a partnership, though certain LLCs can elect to be taxed as C-corporations or S-corporations. LLCs are increasingly popular, as they are relatively less expensive to form and prove more flexible in operation when compared to corporations.

Each entity structure provides inherent advantages and disadvantages. It’s crucial for individuals embarking on the journey of starting their own business to have the support of legal counsel capable of facilitating the most advantageous entity structure for their business.

For more information or to seek counsel from our business & corporate attorneys, please reach out to request a consultation or call us at 216-696-1422.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

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• Trademarks (words, logos, symbols, colors, sounds) associated with the company, product, or service;
• Packaging for a product;
• Creative works (e.g. user manuals, website design, marketing materials, etc.) associated with the company, product, or service;
• Uniforms worn by employees;
• The look and feel of your place of business; and/or
• The design of the product itself.

Branding is critical because it encourages customer loyalty, indicates a high level of quality, and is a source of goodwill and increased value for your business. 

Risks of Not Branding Your Business

Without effective branding, your business and your goods or services are just a generic offering that provides no recognition and does not encourage customer loyalty or repeat business. This often results in one-time transactions, a diminished likelihood of repeat sales, and a reduction in the overall value of your business.

Benefits of Branding Your Business

With the proper branding, consumers come to associate you and your merchandise or services with a particular level of quality. Such “brand association” fosters customer loyalty, encouraging repeat business and boosting referrals. Establishing a brand is an effective way for building a business reputation, enhancing customer awareness and loyalty, increasing the value of your business, establishing credibility and trust with customers, and increasing the effectiveness of marketing efforts.

Establishing a Business Brand

Before you decide on your business brand, you must be certain that it is available for your use. It is vital to reach out to an intellectual property (IP) attorney to research the availability of the brand, as this research can be very nuanced and intricate. If clearance is given from experienced IP counsel, you can feel more confident in dedicating the time, effort, and resources to establish your brand. Establishing your brand may involve securing one or more rights, including:

• Registering a company name with the with the secretary of state;
• Obtaining a trademark registration in your state as well as with the United States Patent and Trademark Office;
• Securing copyright protection for your creative materials;
• Entering business contracts with suppliers, licensees, or distributors to control the branding of the products or services,
• Registering an internet domain name, and
• Attaining a design patent on a product design.

The more of these rights you establish, the better equipped you will be to protect your brand from infringement by others. It is important to engage an experienced intellectual property lawyer who can assist in determining which of these brand-building protections apply to your brand, and can assist in securing the broadest protections possible.

Brand Protection

Once you have established and secured rights in your brand, you now must protect it so that competitors cannot improperly use it and benefit from your goodwill.

The first step in protecting a brand is using it. If you do not use or control the use of your brand, especially for a trademark, you may lose the right to exclude others from using it.

The next step is to monitor the use of your brand (or similar brands) by others. This may include monitoring competitors’ business activities, monitoring trademark applications filed with the USPTO for similar trademarks, keeping abreast of the relevant industry and trends, etc. A trademark watch can be established for this purpose.

The third step is to enforce your rights against infringers. If you do not stop brand infringement, your rights in the brand may be lost with respect to this and other infringing parties. If you find yourself a victim of brand infringement, it is advisable to hire a lawyer to contact the infringing party. Through the counsel of an attorney, a demand to cease the infringement should be made, settlements for any damages caused by the infringement should be negotiated, and if necessary, a lawsuit should be filed.

In summary, establishing and implementing strong branding creates an impactful connection between you and the consumer. This connection not only enables you as a business owner to charge a premium for your goods or services, but it directly contributes to increased profits and the overall value of your business.

If you want to establish a brand, have questions about branding, or if you want to seek counsel from our Intellectual Property practice group, please reach out to request a consultation or call us at 216-696-1422.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

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