If you or your business partner has decided that their time in the U.S. has come to an end, but the remaining partner wants to stay and continue the enterprise, you will likely want to hold a buyout. Hopefully, you already have a buy-sell agreement in your original operating agreement that will help delineate your buyout procedure. But whether you do or you don’t have a well-laid plan, you’re still going to need a buyout agreement to bring your partnership to an end.
Here is a brief tutorial to help you get started. Of course, we recommend that you hire a lawyer to ensure that your buyout agreement covers all the bases properly. However, having a general understanding of what is involved will help you get comfortable with the process, and may begin necessary and healthy conversation between you and your business partner(s). In other words, do not use this without assistance.
Let’s introduce the contract:
CONSENT AND AGREEMENT TO BUYOUT AND RELEASE YOUR COMPANY
THIS CONSENT AND AGREEMENT TO BUYOUT AND RELEASE (this “Agreement”) is made and entered into this ________ day of May, 2012, by and among Party 1 (“P1“), Party 2 (“P2”), and Your Company, LLC, a Florida limited liability company (“Your Company”).
Now, let’s give some background to the events that led up to this buyout. These background statements often begin with legalese like “whereas”:
WHEREAS, P1 and P2 executed that certain Operating Agreement of Your Company, LLC, a member-managed Limited Liability Company on January 1, 20____ (the “Operating Agreement”) related to the creation, management, and operation of Your Company;
WHEREAS, pursuant to the Operating Agreement, P1 and P2 agreed to form Your Company;
WHEREAS, P2 delivered notice of his intent to withdraw from Your Company to all other members;
WHEREAS, P1 and P2 have consented and agreed to waive the written notice and _____ days written notice period before the date of withdrawal so that withdrawal is immediately effective;
WHEREAS, pursuant to the Operating Agreement as defined herein, P1 and P2 entered into mediation to resolve any disputes between them in order to minimize the costs of arbitration or litigation and the risk of economic loss to each of them individual and to Your Company;
WHEREAS, to achieve withdrawal of P2 as member of Your Company, P1 and P2 have agreed to enter into this Agreement;
WHEREAS, the parties hereto believe that the execution of this Agreement is in the best interest of themselves and Your Company to preserve and protect Your Company, from which all parties should benefit, and in order permit Your Company to continue business in a timely manner without delay, the parties hereto desire to enter into this Agreement; and
WHEREAS, P1 and P2, to the best of their knowledge and based upon discussions with staff of Your Company, believe this Agreement will be acceptable and will take no affirmative action to nullify or otherwise disrupt this Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and to induce P1, P2, and Your Company to enter into this Agreement, to permit withdrawal of P2, and to permit the continued existence of Your Company, the parties agree as follows:
Next, we get into the true meat of the agreement:
1. Recitals. The foregoing Recitals are true and correct and are incorporated into and form a part of this Agreement.
2. Buyout. Pursuant to that certain Operating Agreement executed on January 1, 20____ between P1 and P2, and for and in consideration of $1.00, P2 has absolutely sold and conveyed to P1 all of P2’s right, title and interest in Your Company. P1, as a 50% owner and member of Your Company, hereby acknowledges that his consent and agreement to this Agreement is granted in consideration of the terms and provisions of this Agreement, and the agreed upon purchase price of P2’s share of Your Company. P2, as a 50% owner and member of Your Company, hereby acknowledges that his consent and agreement to this Agreement is granted in consideration of the terms and provisions of this Agreement, and the agreed upon purchase price of P2’s share of Your Company. Such purchase price shall be ____________________________________________ dollars. P1 and P2 consent and waive their right to _______days written notice before the date the withdrawal is to be effective.
3. Consent and Transfer to P1. The parties acknowledge, agree, and consent that P2 intends to cause all of P2’s right, title and interest in Your Company to be transferred from P2 to P1 and upon the effective date of such transfer, P1 shall be deemed to be sole member and owner of Your Company for all purposes of this Agreement and the Operating Agreement and shall be deemed to have succeeded to and assumed all of Your Company’s rights and obligations thereunder.
So, we’ve transferred the company’s assets and title. If you really want to cut ties and walk your separate ways, you may also want mutual releases of liabilities and indemnification:
4. Release. P2 hereby releases P1, Your Company, all of their subsidiaries, and each of their directors, officers, shareholders, employees, agents and attorneys (collectively, the “Your Company Related Parties“), and the Your Company Related Parties hereby release P2 from any claims or potential claims it or he has or may have against each other concerning Your Company and the Operating Agreement for acts or omissions occurring on or prior to the effective date of this Agreement, but specifically excluding any claims arising from any misrepresentation, act or omission or failure to perform any obligation under this Agreement.
5. Indemnification. P2 agrees to indemnify and hold harmless each of the Your Company Related Parties from any and all loss, costs and expenses (including, without limitation, all legal fees and costs) resulting from any misrepresentation of P2 to any of them under this Agreement and any claims or potential claims from third parties based on any prior dealings between such third parties and P2 concerning Your Company and the subject matter of the Operating Agreement provided that Your Company shall remain responsible to perform its express obligations set forth in the Operating Agreement. Each of the Your Company Related Parties agrees to indemnify and hold harmless P2 from any and all loss, costs and expenses (including, without limitation, all legal fees and costs) resulting from any misrepresentation of any of them under this Agreement and any claims or potential claims from third parties based on any prior dealings between such third parties and any of the Your Company Related Parties concerning Your Company and the subject matter of the Operating Agreement which were not permitted dealings thereunder.
And if you’re worried about your business partner coming back unannounced, or want to make sure to protect your personal information, you may consider a noncompete and confidentiality agreement. Remember to check your state’s laws on noncompete agreements:
6. Noncompete/Confidentiality. Unless otherwise agreed to by Your Company, P2 agrees that (a) he shall and shall cause each entity in which he shall directly or indirectly own any equity interests (or if such entity is a publicly traded entity, any such entity in which he owns at least 10% of the outstanding voting equity interests), together with any officers, directors, equity owners, employees and agents of such entity (collectively, the “Noncompete Parties”), to comply with each of the noncompetition and confidentiality provisions set forth in this Agreement, and (b) that he shall not and shall cause each of the other Noncompete Parties to not directly or indirectly solicit or enter into any consulting, brokerage, management, financing or other similar agreement with any business with respect to its X type of business and related services or with any party seeking such an agreement with such business or other X type of business and related services enterprise, related to a X type of business and related services enterprise located or to be located within a fifty (50) mile radius of the Your Company’s X type of business and related services enterprise or the Your City area for five (5) years from the effective date of this Agreement. This Agreement, the Operating Agreement, the business contacts, trade secrets, and goodwill of Your Company, and any disputes between the parties to this Agreement shall remain confidential, except for disclosures of information by a party reasonably required in the ordinary course of its business or by applicable law or regulation.
In order to dot your i’s and cross your t’s, you and your partner may wish to assure each other that you haven’t already sold the farm last week, and that you will do whatever it takes to close the deal before departure:
7. Representations and Warranties. P2 hereby represents and warrants that (a) P2 has transferred to Your Company all rights and assets held by P2 with respect to Your Company and the Operating Agreement, (b) except for any agreement expressly referred to herein, P2 has not entered into any agreements or understandings with any party with respect to Your Company, (c) P2 has not taken any act or failed to take any act that would cause a default or breach by Your Company of its obligations under the Operating Agreement, (d) P2 has not directly or indirectly assigned, conveyed, pledged or otherwise transferred to any party any interest or rights in Your Company or any revenues or profits to be derived therefrom, and (e) P2 has the full legal right and authority to execute, deliver and perform this Agreement, and the consent, authority or signature of no other party is required in connection therewith.
8. Further Assurances. P2 agrees to execute such additional documents and agreements as are necessary to effectuate the intents and purposes of this Agreement.
Finally, while cooler heads are prevailing, you should think about how you would wish to work out future disputes (just in case):
9. Governing Law. This Agreement will be governed by and interpreted in accordance with Florida law.
10. Dispute Resolution. In connection with any dispute hereunder, the parties agree to negotiate in good faith for up to twenty (20) days. If they are unable to resolve the dispute in such period, then either party may demand and such dispute shall be submitted to mediation and thereafter binding arbitration pursuant to Section Z of the Operating Agreement. No mediator or arbitrator or other party to a mediation or arbitration proceeding may disclose the existence, content or results thereof, except for disclosures of information by a party required in the ordinary course of its business or by applicable law or regulation. If more than one agreement for mediation and arbitration by or between the parties potentially applies to a dispute, the mediation and arbitration provision most directly related to the documents between the parties or the subject matter of the dispute shall control. This mediation and arbitration provision shall survive termination, amendment or expiration of any of the documents or any relationship between the parties.
11. Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors and assigns, except that P2 may not assign his rights or obligations hereunder except with the prior written consent of P1 in its sole discretion.
12. Miscellaneous. Time is of the essence in the performance of this Agreement. This Agreement and the documents referred to herein embody the entire agreement and understanding between the parties with respect to the subject matter hereof and thereof. This Agreement supersedes all prior agreements and understandings relating to the subject matter hereof. This Agreement may be executed in any number of counterparts and by facsimile, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart, provided that this Agreement shall not become effective until all parties have executed the same.
We hope having a general concept of the buyout agreement starts a healthy dialogue between you and your business partners. The cleaner the departing treaty trader or investor partner can walk away, the happier all parties will be in the future.
Have you wondered where the visas get their names?
It’s a rather trifling matter, but the alphabetization of the nonimmigrant visa classes can create anonymity and an impersonal tone to the entire visa application process right from the beginning. Knowing where the visa names come from, and the foundation of their meaning, can make them seem less unfamiliar and less intimidating. Less intimidation means more comfort and confidence, which in turns makes your immigration experience more enjoyable and successful (we hope).
The root of the visa names is based on their placement in the INA Code (that’s INA for Immigration and Nationality Act, the major piece of U.S. law governing immigration in the U.S. – for more on the INA, see this article).
Welcome to Immigration 101
As with many pieces of legal code, the INA begins with a section 101, where all the major words used in the code are defined. Not surprisingly, this section is called “Definitions“. Going from A to Z, Section 101(1) starts with “administrator”, and by 101(38), you’re at “United States”. Unfortunately, thereafter the alphabet is lost to later add-ons, such as the ever-extensive “aggravated felony” and the ironically forgotten “stowaway”.
Actuating Anonymity by Alliteration and Alphabetization of Areas
At Section 101(15), one comes to the meaning of “immigrant”, which is defined by what it is not, rather than that which it is. Pursuant to Section 101(15), the term “immigrant” means every alien except an alien who is within one of the following classes of nonimmigrant aliens: Ambassador, temporary Business or pleasure, Continuous transit, Deckhands and crewman, trEaty traders and investors, Foreign students, Government diplomat, Highly skilled workers, International exchange program people, Karat-laden fiancées, Long-term employees of foreign companies, Mixed studies vocational and nonacademic students, Non-separated families, extraOrdinarily able people, Photogs and athletes, Qultural exchange visitors, Religious visitors, Snitches, Trafficking victims, abUse victims, and permanent Visa families. Now obviously, some of the above alphabetization requires a stretch of the imagination. But the notion is there. A through V is the list of different ways you can be a temporary visitor of the U.S. under Section 101(15)’s definition of (non)immigration.
Business or pleasure,
Deckhands and crewman,
trEaty traders and investors,
Highly skilled workers,
International exchange program people,
Long-term employees of foreign companies,
Mixed studies vocational and nonacademic students,
extraOrdinarily able people,
Photogs and athletes,
Qultural exchange visitors,
abUse victims, and
permanent Visa families.
Most of these apply to few people, and a few of these apply to almost everybody. We hope that our breakdown helps break down the wall of anonymity behind the nonimmigrant visa titles. Considering the alliteration employed, we have to imagine that even the drafters of the legislation hoped to bring a bit of personality to the code.
Hello TPS seekers,
MIA has been getting requests for information regarding the expiration of current status before the approval of TPS. Please be aware that TPS is like a limited asylum. Once TPS ends, a person should return to the immigration status that he or she held prior to being granted TPS. Before TPS begins, one should have another immigration status to cover your time in the U.S. If you become out-of-status before being granted TPS, you may return to out-of-status upon expiration of TPS.For those planning on returning to your home country as soon as the peril has subsided, this may not be a problem. For those of you planning on seeking a longer stay in the U.S., please beware.
Recall, however, that one may apply for another immigration benefit while registered for TPS. TPS does not appear to prevent you from applying for nonimmigrant status, filing an adjustment of status application, or applying for any other immigration benefit or protection. Notwithstanding, if you fall out of status before being granted TPS, you may be ineligible to adjust status.
For these reasons, we highly recommend that you investigate your options for other nonimmigrant and immigrant visas or applications that may cover your time before and after TPS status.
Most immigration attorneys will provide an initial consultation for free or at a nominal cost. Please contact MIA if you have any questions.
THE GUANGCHEN DEVOLUTION
Chen Guangchen’s asylum request devolved further into complication today, as Guangchen was reunited with his family outside of the U.S. embassy in Beijing. In case you have not heard of the figure-lawyer-asylee at the epicenter of the recent U.S.-China asylum debacle, Chen Guangchen is a political activist newly crowned as a symbol of the campaign for women’s rights, particularly in rural China. Adding to the charisma of this heralded storyline is Guangchen’s success in training himself in the field of law, despite being blind. For your wiki briefing, you can read Guangchen’s Wikipedia page here: [Wikipedia page on Chen Guangcheng].
Guangchen was catapulted into international renown after coordinating a class-action lawsuit against the city of Liny for excessive enforcement of the one-child policy. The same one-child policy was recently dubbed “China’s Achilles heel” by The Economist, due to the long term economic impact of China’s slackening fertility rate and projected financial and social burden of the 4-2-1 problem (one young male adult financially supporting two parents and four grandparents in retirement). You can read that article and readers’ comments here: [The Economist article on China’s Achilles heel].
The class-action lawsuit unearthed forced abortions and sterilization in the Shandong province, and earned the ire of an ever-indifferent Chinese governmental machine that shrugs the cost of human rights for industrial and economic development.
A GUANGCHENG-FREE TWITTERSCAPE
Don’t be surprised or ashamed if you are not up to speed on Guangchen or his prior legal accomplishments. The Chinese political machine maintains a tight leash on those words Chinese citizens may search, google, twitter, or otherwise. The Washington Post has allegedly acquired a version of the banned list, and has written several articles about internet searches and social media. One of those earlier articles can be found here: [Washington Post article on China banned list].
China’s Republic has added Chen Guangcheng to the banned words list. Thus, his name may not be pouring out of the famished Chinese blogosphere. Information on the subject from inside The Great Wall may be hard to come by. China’s complex filtration of dissident vocabulary stems back at least to the uprising in Tiananmen Square.
THE GREAT WALL OF TWEET REMINISCENT OF FANG LIZHI’S ESCAPE POST-TIANANMENT SQUARE
Chen Guancheng is not the only activist to fall prey to the Googlecide of the great Chinese apparatus. One of my physics professors back at The University of Arizona, recently deceased, suffered the same plight. Fang Lizhi, an asylee, recently passed away in Tucson, Arizona. You can see his University of Arizona bio page here: [University of Arizona on Fang].
Fang Lizhi’s attempts to open the post-Mao Zedong politico-economic system helped spurn the Tiananmen Square demonstrations and subsequent violent live-fire military street cleansing. Approaching socialism from a stance of study rather than love, Lizhi faced some 13 months in a hidden, book-camouflaged bunker to elude capture by the Chinese government. That may have been one of the few good turns of Henry Kissinger. Fang’s obituary can be read from The Guardian, here: [Guardian article on Fang obituary].
FROM FANG TO WANG, ESCAPE TO DISAPPEARANCE
Let’s hope Chenguang’s journey does not take the protracted twists of Wang Lijun, the Chongqing police chief who fled to a consulate last February. After about 30 hours at the U.S. embassy, the U.S. consulate denied Wang’s asylum petition and released him to the wild. Wang was quickly shuttled to Beijing by Chinese officials, and thereafter disappeared. He has not been heard from since. You can read the BBC’s account of his harrowing tale, and more about the Bo Xilai scandal, here: [BBC article on Wang Lijun].
In defense of the U.S. decision, there were allegations of Wang’s participation in torture for confessions. That’s a big no-no when it comes to granting asylum. I think there might even be some express provisions in the Immigration and Nationality Act against importing that type of element. Others, however, believe that Wang could have been one of the highest-level defectors from inside China’s leadership class. Perhaps that’s like mounting a great bearded elk on the trophy wall. This would not be the first internal disagreement on asylum decision-making.
MIAMI INTERNATIONAL ATTORNEYS WAXES ALLUVIUM ON CHINESE ASYLEE STATUS
On April 5, 2012, Miami International Attorneys posted an article discussing recent U.S. immigration law asylum decisions involving Chinese citizens and the likely reaction of the Chinese government to international interference. There, MIA ruminated over China’s likely interpretation that asylum amounted to nothing more than American meddling. MIA’s previous article can be found here: [Miami International Attorneys’ article on China asylum decisions].
The article posted by Miami International Attorneys came on the heels of several immigration appeals decisions. On the heels of the recently sparking Chen Guangcheng disruption is Secretary of State Hillary Rodham Clinton.
WELLESLEY GIRL HIL STEPS IN IT
According to The Daily Beast’s Melinda Liu, Chen Guangcheng wants a ride on Hil’s party train. In an alleged exclusive interview with Liu, Chen claims that U.S. officials have abandoned him at a Chinese hospital and Chen begs to leave the country on Hillary Clinton’s plane. These purported allegations beg the question of who was going to mend Chen’s broken paw after he leaped the backyard wall during his daring escape from house arrest and 650-kilometer trek to Beijing. Even fleeing high school kids have to face the music when one breaks a wrist at a kegger break-up. We are sure that Clinton had this in mind when she came to Beijing for high-level talks. The BBC reports that Clinton’s goal of cementing relations and discussing security and economy should not be dimmed by the recent immigration distractions. You can read the article here: [BBC article on Clinton in Asia].
So, let’s stay tuned. The Chen Guancheng saga has surely not drawn to a close; and no matter how many months Mr. Guancheng ends up behind a bookshelf in the U.S. embassy, American attention spans will surely expire by month’s end.