A Message from the Chair: Two Volunteer Opportunities

By Ben Baldwin, Chair of the NCBA Business Law Section

Hello, fellow Business Law Section members.

I want to put out a loud and emphatic call for volunteers for two important undertakings of our section.

First, as I had mentioned in my Blog post in July, we are in the process of planning the CLE in conjunction with the section’s annual meeting in February 2021 (which will be held in a virtual/online format). We have had some good success recruiting a few members of the planning committee, but we still need more to help in that effort. Whether or not you have had any experience in planning any CLE, if you are at all inclined to give it a try, we would love to hear from you.

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2020 Basics of Business Law Early Bird Registration Discount

By Ritchie Taylor, CLE Chair of the NCBA Business Law Section 

Don’t miss the early bird discounted registration fee of $255 for the 2020 Basics of Business Law CLE to be held on Friday, October 2, 2020, from 8 a.m. to 4:20 p.m.

This year’s program will be held via live webcast, giving participants the ability to participate from anywhere.

 

 

Included Sessions

  • Legal Entity Choice
  • Organizing and Operating a Corporation
  • It’s Just Tax
  • Overview of Intellectual Property Law
  • The Deal Hike
  • Basics of a Private Placement
  • Employment Law
  • Conflicts, Claims and Common Concerns for Business Law Practitioners (Ethics)

For the full agenda and registration information, please visit https://cle.ncbar.org/courses/23446.

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A Message from the Communications Chair of the NCBA Business Law Section

By Andrew Steffensen, Business Law Section Communications Chair

Dear Members of the Business Law Section:

As many of you are aware, the Business Law Section maintains a blog that allows members of the Section, as well as other contributors, to post articles that might be relevant to the members of the Business Law Section. As we move through the early stages of the 2020-2021 bar year, I would like to encourage all members of the Section to consider contributing content to the Business Law Section blog. The Section’s blog has been very successful, and we hope to continue that success through this bar year.

I would also like to encourage members of the Business Law Section to consider serving on the board of editors for the Section blog. Members of the board of editors are responsible for generating new content and articles for the blog on a rotating basis. Serving on the board of editors is a great opportunity to provide meaningful content to fellow members of the Business Law Section and help further the success of the blog. Please reach out to me directly if you are interested in contributing content to the Business Law Section blog, or if you are interested in serving on the board of editors.

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New Bar Year, New Challenges: A Message from the Chair 

By Ben Baldwin

Hello, fellow members of the Business Law Section, and welcome to the 2020-2021 bar year. Please permit me to begin the way I find myself beginning pretty much all written correspondence these days—with an expression of hope that you all are healthy and are navigating things safely and as cheerfully as possible!

It is again my honor to serve as Chair of the Section and to work with such an outstanding group of council members, committee co-chairs, and NCBA staff.

As always, it is our goal to make sure your Section membership comes with first-rate programming, activities, content, and other benefits—all with the overarching objective of enhancing your law practices and professional development. But as never before, this goal (like the goals and objectives of our firms and the clients we serve) is beset with steep challenges—those, of course, posed by the COVID-19 pandemic.

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Emergency Remote Notary, Witnesses and Execution of Health Care Directives Without Witnesses During Emergency

By Andrew Atherton

This article was originally published on the Elder & Special Needs Section blog.

[Editor’s note: We appreciate the substantial contributions of John H. Griffing of Griffing Leazer, PLLC in Gastonia and Kathleen R. Rodberg of McGuire Wood & Bissette in Asheville in preparing this post for timely publication. Please look for a separate post by Kathleen R. Rodberg on guardianship changes shortly.]

[Additional Writer and Editor’s note: When assisting clients with estate planning documents this statute does not alter legal precedent requiring original wet signatures and original wet notarizations on most documents. This blog only focuses on the steps a notary would take in completing a remote video notarization when an original wet signature is required. Please reference the provisions of G.S. 10B-25(e)(1) for direction on remote video notarization when an original wet signature and original wet notarization are not required for the document.]

Attorneys from the Elder and Special Needs Law Section of the North Carolina Bar Association in collaboration with NC NAELA, other sections of the North Carolina Bar Association and its leadership, other interested parties, and the North Carolina General Assembly have been working to introduce the legislation that passed on May 2, 2020, and was signed into law by Gov. Cooper on May 4, 2020, authorizing remote notarization, remote witnessing, and execution of health care directives without witnesses during the state of emergency. There were a lot of compromises. Ultimately, we have legislation that will aid you in providing safe assistance to your clients during the COVID-19 public health crisis.

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New North Carolina Executive Order Addresses Nonprofit Corporation Member Meetings during the COVID-19 Crisis

By Peter Mattocks

Many nonprofits in North Carolina are on the front lines of the COVID-19 crisis struggling to meet increased demands for their services and may not be focused on logistical problems related to having member meetings.

The North Carolina Nonprofit Corporation Act (the “Act,” as set forth in Chapter 55A of the North Carolina General Statutes) provides default rules and defines the bounds of how member and board meetings may be conducted.

Section 55A-8-20(b) of the Act already permits directors of nonprofit corporations to participate in board meetings remotely. There is no parallel in the Act’s provisions on member meetings, and in fact, Sections 55A-7-01 and -02 of the Act state that annual and special meetings of members are to be held at a “place” stated in or fixed in accordance with the corporation’s bylaws. This language suggests, but does not definitively state, that annual and special member meetings can only be held on an in-person basis and not remotely. The language creates a problem for nonprofits given the Gov. Cooper’s prior Executive Orders (and municipal orders) limiting mass gatherings during the COVID-19 crisis to no more than 10 people.

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Message from the Chair of the NCBA Business Law Section

By Ben Baldwin

Dear Members of the Business Law Section:

Yesterday (Tuesday, April 7, 2020) the office of the North Carolina Secretary of State advised registered agents of entities organized in North Carolina as follows:

“By law, most Annual Reports and fees are due April 15 for corporations, LLCs, and other business entities. Like many other state agencies, we do not have the statutory authority to extend an Annual Report filing date or associate fees. However, any Annual Reports and fees due on April 15, 2020 will not be considered delinquent until after June 15 (emphasis added). (This applies to corporate and some partnership entities with a fiscal year ending Dec. 31, 2019, and all LLCs).”

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Message from the Chair of the NCBA Business Law Section

By Ben Baldwin
Chair of the NCBA Business Law Section 

Dear Members of the Business Law Section:

Yesterday (Wednesday April 1, 2020) Governor Roy Cooper issued Executive Order 125 (“Authorizing and Encouraging Remote Shareholder Meetings During the COVID-19 State of Emergency”).

The Order, which is limited in effect to corporations holding shareholder meetings under the North Carolina Business Corporation Act (the “Act”), is intended to facilitate the holding of shareholder meetings against the backdrop of the Governor’s prior Executive Orders (and various municipal orders) limiting mass gatherings during the COVID-19 crisis.

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Small Business Lawyer’s Guide to CARES Act Funding

Ritchie Taylor

Bradley S. Wooldridge

By Ritchie Taylor and Bradley S. Wooldridge 

The Coronavirus pandemic has caused an unprecedented halt to our otherwise healthy economy. Senate Republicans and Democrats, along with Secretary Mnuchin and the Trump administration, have been working since late last week on what they have referred to as the Phase III of the COVID-19 legislation, which is largely a stimulus bill to provide much needed liquidity to both large and small businesses, as well as individuals, to assist in bridging the financial gap anticipated by this economic halt.

The Senate passed the stimulus bill, H.R. 748, the “Coronavirus Aid, Relief, and Economic Security Act” or the “CARES Act” on the evening of March 25, the House passed the bill on March 27 and it was signed by President Trump into law the same day.

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The Art of Negotiating Working Capital in M&A Transactions

Kenneth H. Marks

John A. Howard

By Kenneth H. Marks and John A. Howard

The selling process for a privately held company has many nuances, including the analysis of the total value of a transaction.  For the experienced seller and their team, terms and conditions of the deal can be just as critical as the purchase price.  One of those key terms is called the working capital target.

In accounting terms, working capital is equal to current assets minus current liabilities. In middle market M&A transactions (those beyond the small, Main Street asset deals), the selling company is typically expected to deliver a normalized level of working capital (which is defined slightly differently from the accounting definition, as we discuss later) to support the operations of the business post-closing. Calculating the working capital and figuring the basis for the analysis is somewhat of an art and often changes depending upon the norms within a specific industry. Historical trends can be a sound baseline for establishing the target amount. The argument that a buyer can operate the seller’s company with less working capital than the seller is hard to defend without evidence. In growth financings, tightening the working capital cycle can provide a cheap and quickly accessed source of funding. In both M&A and growth financing, optimizing the working capital cycle and assuring efficient use of this capital will increase the value of the business by decreasing or minimizing the capital required to fund the operating cycle.

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