Oldham Law, PLLC Oldham Law, PLLC 2026-10-09T13:34:54Z https://www.lonestarbusinesslaw.com/feed/atom/ WordPress /wp-content/uploads/sites/1103155/2023/04/cropped-Oldham_law_PLLC_site_icon-min-32x32.png On Behalf of Oldham Law, PLLC <![CDATA[What an LLC’s company agreement should say about a member leaving]]> https://www.lonestarbusinesslaw.com/?p=256645 2026-10-09T13:34:54Z 2026-10-09T13:34:54Z Withdrawal procedures Your company agreement should explain when and how a member may leave the LLC. Under Section 101.107 of the Texas Business Organizations Code, a member generally cannot withdraw or be expelled unless the agreement provides otherwise. Specify the permitted reasons for leaving and any conditions the departing member must meet.

Notice and approval requirements

Set clear rules for notifying the LLC about a planned departure. For example, you could require written notice within a specified period and explain whether the remaining members must approve the withdrawal. These terms help everyone understand the process and prepare for changes in ownership or management.

Buyout terms and valuation

Your agreement should explain whether the LLC or its remaining members must buy the departing member's ownership interest and how they will calculate the price. You could use an agreed formula or require an independent appraisal. Also, specify whether the buyer can pay in installments and when payment must occur.

Rights after departure

Clarify which rights end when a member leaves and which obligations continue. Address the member's voting and management authority, any remaining right to receive distributions and duties such as protecting confidential business information. If the departing member keeps an economic interest, explain what that means for future payments and involvement in the company.

Review your exit terms before a departure

Clear withdrawal rules, notice requirements, buyout terms and post-departure rights can help prevent disagreements when an LLC member leaves. Review your company agreement with a Texas business attorney to identify gaps, confirm that the provisions comply with state law and decide how to handle an ownership transition before a dispute arises.]]> On Behalf of Oldham Law, PLLC <![CDATA[Is your noncompete agreement actually enforceable in Texas?]]> https://www.lonestarbusinesslaw.com/?p=256643 2026-09-08T10:28:07Z 2026-09-08T10:28:07Z The ancillary contract to an enforceable agreement A noncompete agreement usually cannot exist on its own. It has to be part of a real, valid contract that includes something the employee gets in return. For example, you may include it in a confidentiality agreement or a nondisclosure agreement (NDA). This means the employee must receive something of value in exchange for agreeing not to compete. That value can include specialized training, access to private information or another real benefit from the employer. If the employee does not receive anything meaningful in return, a court will likely say the agreement is not enforceable. In other words, you must support the promise not to compete with a valid exchange, not just have the employee sign it on its own.

Passing the reasonableness test

Texas courts generally apply a three-pronged test to ensure the restraint is not broader than necessary to protect your business interests. Generally, a judge may see limits of six months to two years as fair while anything longer requires significant justification. The limit should also match the territory where the employee actually worked. A nationwide ban for a local sales rep, for example, may likely raise concerns in court. Moreover, your agreement cannot stop a former employee from working in the industry entirely. Restrictions must be narrowly tailored to the specific type of work they did for you. If your noncompete agreement is too broad, a judge can rewrite it to meet reasonable standards.

Legitimate business interest protection

You typically cannot use a noncompete just to keep a former employee from competing with your business. Instead, you must show that the restriction is necessary to protect a real business interest. This can include customer goodwill, trade secrets or other proprietary information.

Smart protection starts with smart drafting

For business owners and investors, it is vital to protect what you have built before your competition does it for you. Getting the details right in noncompete agreements is also a form of risk management. Whether you are launching a new venture or managing an established enterprise, working with an experienced attorney can help you tailor your contracts to Texas law.]]> On Behalf of Oldham Law, PLLC <![CDATA[What records should you gather before a commercial lawsuit?]]> https://www.lonestarbusinesslaw.com/?p=256639 2026-07-31T16:08:52Z 2026-07-31T16:08:52Z Contracts and agreements These help explain what each side agreed to do. Gather copies of all agreements that shaped the business relationship, including:
  • The signed contract
  • Amendments
  • Purchase orders
  • Statements of work
  • Accepted proposals
In Texas, many business disputes depend on the exact language of an agreement because even a single provision can affect each party's rights and responsibilities. Even small details, such as payment deadlines or delivery requirements, can affect how a court views your claim.

Payment and financial records

Proof of money owed or paid helps establish the financial side of the dispute. Gather records such as:
  • Invoices
  • Payment confirmations
  • Bank or account statements
  • Receipts
  • Records of unpaid balances or partial payments
These can help show whether an obligation was met, whether payments stopped unexpectedly or how much your business claims it lost.

Emails and other communications

Conversations often explain what happened when a contract alone cannot. Save related written communications, such as:
  • Emails
  • Text messages
  • Letters
  • Messages discussing changes to the work
  • Conversations about missed deadlines
  • Attempts to resolve the issue
Keeping these messages in chronological order can also make it easier to show how the dispute developed over time without relying on memory alone.

Supporting business records

Additional evidence can strengthen your position by confirming important facts. Depending on the dispute, helpful materials may include:
  • Delivery receipts
  • Inspection reports
  • Project files
  • Photographs
  • Inventory records
Focus on documents that directly relate to the disagreement instead of gathering every record your business has. A well-organized file is usually more useful than a large collection of unrelated information.

Build a stronger case with the right records

Organizing these documents before filing a lawsuit can save time and make it easier to understand the strengths and challenges of your case. Reviewing everything with your attorney before taking legal action can help identify if you need additional information and ensure your records accurately reflect what happened before the dispute reaches court.]]> On Behalf of Oldham Law, PLLC <![CDATA[What at-will employment really means for Texas employers]]> https://www.lonestarbusinesslaw.com/?p=256634 2026-06-30T15:22:18Z 2026-06-30T15:19:48Z In Texas, a business owner can fire an employee for almost any reason or for no reason at all. That one word, almost, is where many well-meaning employers end up facing a lawsuit. At-will employment offers real flexibility, but it comes with limits that are easy to miss until a former employee points them out.

The basic rule

The Texas employment rule says either side may end the working relationship at any time. That can happen with or without notice, unless a law or express agreement says otherwise. An employer generally does not owe a reason, a warning or another chance. The same rule can also allow changes to pay, schedules, job titles, duties and policies as business needs shift. That freedom is why at-will status matters so much to growing companies.

The exceptions that limit employers’ decisions

At-will employment stops where state or federal law draws a line. A Texas employer generally cannot fire someone because of race, sex, religion, age, disability or national origin. It also cannot retaliate because a worker filed a workers' compensation claim, reported a wage problem, requested protected leave or took another legally protected step. Texas also has a narrow common-law public-policy exception. Under the landmark Texas ruling in Sabine Pilot Service, Inc. v. Hauck, an employer cannot fire an employee solely for refusing to commit a criminal act on the employer's behalf. For that reason, "at will" should never mean "anything goes."

Why written documents matter

Many at-will problems start on paper. An offer letter that promises a year of employment can weaken at-will status. The same risk can come from a handbook that appears to require strict disciplinary steps or a side agreement that requires good cause. A business owner should review these materials before hiring, promoting or disciplining workers. The goal is to keep the language clear, consistent and aligned with the company's actual intent. For employers facing workforce disputes, early employment law guidance can help preserve that structure before conflict begins.

Apply policies the same way every time

A good policy can still cause problems if it is not applied the same way to everyone. If one employee is fired for behavior that others were allowed to get away with, it may look like the real reason was discrimination or retaliation. Consistency does not take away at-will flexibility. It helps show the company had a valid business reason for its decision. For a growing Texas business, keeping clear records can make that decision easier to defend if anyone questions it later.

Protect at-will status before a dispute starts

At-will status works best when a company treats it as an asset to maintain, not a label to assume. A useful first step is to read offer letters, handbooks, policy acknowledgments and termination forms from the viewpoint of a departing employee's lawyer. Any phrase that sounds like guaranteed employment, automatic discipline steps or termination only for cause deserves attention before it becomes evidence. Fixing that language now is usually easier than explaining it in a courtroom later.]]> On Behalf of Oldham Law, PLLC <![CDATA[3 legal requirements to start a Texas LLC]]> https://www.lonestarbusinesslaw.com/?p=256631 2026-06-15T12:33:26Z 2026-06-15T12:33:26Z Certificate of formation If you want to register an LLC in Texas, you need to fill out and file a certificate of formation with the Texas Secretary of State. You may file through the SOSDirect portal and the certificate serves as your new venture’s permanent public record. A Certificate of Formation performs important functions such as granting your business legal recognition and securing owners’ limited liability protection. The Certificate of Formation establishes your LLC’s legal existence with Texas. Keep in mind that not every business type needs to file one. In Texas, filing a Certificate of Formation is required for filing entities, which include limited liability companies, corporations, nonprofit organizations, limited partnerships, professional associations and limited liability partnerships. If you select a different business structure, different legal documents will apply.

Business licenses and permits

Depending on the nature of your business and your location, you will need specific business licenses before you can operate. Your local city or county may require zoning or occupancy permits. You may need professional licenses for industries such as real estate and construction. Before starting your Texas LLC, take a closer look at local, state and federal requirements for licenses and permits. Do not overlook industry-specific permits for your business either!

Employer identification number

Think of an Employer Identification Number as a Social Security Number, but for your business—it’s a unique nine-digit code assigned by the IRS. The EIN allows the IRS to identify your business easily for taxation purposes. The US requires the EIN when your LLC performs essential operations like hiring employees, filing taxes or opening business accounts with banks. You can obtain an EIN easily. After you register your LLC with Texas, you can apply online through the IRS website and receive it within minutes. You can also apply via fax or mail using form SS-4 too.

Protecting the venture with the right guidance

Knowledge of Texas laws can help you understand LLC requirements. You can avoid legal hiccups during the early stages with proper research before action. Don’t hesitate to reach out to a business law professional to help set up your LLC.]]> On Behalf of Oldham Law, PLLC <![CDATA[How does ownership differ in Texas LLCs, LLPs and corporations?]]> https://www.lonestarbusinesslaw.com/?p=256625 2026-05-14T10:25:01Z 2026-05-14T10:15:50Z or reshaping a business in Texas often begins with one key question: how does ownership actually work in each business structure? The answer can shape how you share control, split profits and make day to day decisions. Texas law sets different rules for limited liability companies, partnerships and corporations under the Texas Business Organizations Code. Each structure treats ownership in a different way, which can affect how you run your business over time.

How does ownership work in an LLC?

A limited liability company (LLC) usually gives ownership to its members. You can think of members as the people who invest money, time or effort into the business. Ownership does not always get split equally and your company agreement often decides how profits and control get shared. Under Texas Business Organizations Code, LLCs often allow flexible rules for management and profit sharing. Because of this, ownership can reflect each person’s role, effort or investment rather than a fixed formula.

How does ownership work in an LLP?

A limited liability partnership (LLP) works a bit differently because ownership stays with the partners. You and the other partners usually share control and decision making based on your partnership agreement. Texas Business Organizations Code allows LLPs to limit personal liability for certain business debts and obligations of the partnership. Even so, ownership often ties closely to how each partner takes part in the business and the roles you all agree to take on.

How does ownership work in a corporation?

A corporation separates ownership from daily management. Shareholders own stock, which shows how much of the company they own. A board of directors and company officers usually handle day to day operations and major decisions. Under Texas law, corporations often use voting rights tied to shares. This can create a clearer split between ownership and control. At the same time, Texas law may allow close corporations or shareholder agreements that reduce or even remove the board, which can shift more control to shareholders.

Why do ownership differences matter?

Ownership structure can affect how your business works in everyday situations. Before you choose or change a structure, it can help to think about how each option handles control and money.
  • Decision making power may rest with members in an LLC, partners in an LLP or a board in a corporation depending on the structure
  • Profit sharing may follow ownership shares or agreed terms set in the governing agreement or company rules
  • Management may stay flexible in an LLC or LLP, while corporations may use more formal systems with officers and directors
These differences can shape how smoothly your business runs as it grows or changes over time.

Final thoughts on your business journey

Understanding how ownership works in each structure can help you think more clearly about your business formation plans in Texas. Since every business situation can look a little different, the best fit often depends on how you want to balance control, responsibility and financial sharing over time.]]> On Behalf of Oldham Law, PLLC <![CDATA[LLC vs. S corporation in Texas: What business owners should know]]> https://www.lonestarbusinesslaw.com/?p=256623 2026-04-21T15:50:54Z 2026-04-21T15:50:54Z The LLC: Flexible and founder-friendly Under the Texas Business Organizations Code (TBOC), an LLC offers flexibility in ownership, management and profit distribution. Its governing document, known as a company agreement in Texas law, is your business rulebook. A well-drafted company agreement should address:
  • Ownership percentages and voting rights
  • How profits and losses are distributed
  • Procedures for adding members or resolving disputes
Without a company agreement, you are stuck with the state's standard rules. This means each member's profit share depends on the agreed value of their contribution to the business. Major decisions, such as fundamental changes to the business structure, also require a two-thirds vote of all members. This may not reflect how you and your partners intended to run your enterprise.

The S corporation election: A tax strategy, not a structure

For owner-operators, this election can reduce self-employment tax exposure, but only on profits that exceed a reasonable salary for the work performed. The IRS also imposes restrictions on eligibility:
  • The business cannot exceed 100 shareholders
  • All shareholders must be U.S. citizens or resident aliens for tax purposes
  • The business may only issue one class of stock
If your business plans to bring on a large investor base or foreign partners, these limits could affect your long-term flexibility.

Protect what you are building

Both an LLC and a corporation create a liability shield that can protect your personal assets from business debts and legal claims. The wrong structure, a poorly drafted company agreement or missed compliance requirements can compromise that protection from the start. Understanding your options before you file is one of the most valuable steps you can take. A qualified business law attorney can help you evaluate which structure best fits your goals.]]> On Behalf of Oldham Law, PLLC <![CDATA[How courts in Texas decide if a contract breach is serious]]> https://www.lonestarbusinesslaw.com/?p=256619 2026-03-06T13:36:28Z 2026-03-06T13:36:28Z When someone breaks a contract, you might assume the other side can walk away and sue. But Texas courts do not treat all breaches the same. Before deciding what happens next, a court looks closely at how serious the breach was — and that decision can change everything about your case.

What counts as a minor breach?

A minor breach occurs when one party fails to comply with the contract fully. Say your contractor finishes a renovation three days late. That is a breach — but if they did the work correctly and the delay caused you no major problems, you still have to pay. Texas follows the "substantial performance" rule: if a builder completes most of the work in good faith, they can still collect payment minus the cost to fix small errors. You may recover money for the delay, but you generally cannot cancel the whole deal.

What makes a breach serious enough to matter?

A material breach goes beyond a small mistake. Texas courts apply a five-factor balancing test to determine whether a breach is truly major:
  • Lost benefit: How much did you actually lose?
  • Money damages: Can you recover fair compensation?
  • Hardship on the breaching party: How much will canceling the deal hurt them?
  • Chance to fix it: Can the breaching party cure the mistake in time?
  • Good faith: Did the party break the contract by accident or on purpose?
When a court finds a material breach, it excuses you from future obligations — you may stop paying or performing. But be careful: if you stop paying and a court later decides the breach was minor, you could face a lawsuit for breaking the contract yourself.

What your next steps could look like

A contract dispute in Texas can be hard to navigate alone. Talking with a contract attorney — even for an initial conversation — may help clarify where you stand. An attorney can review your agreement, walk you through your options and help you avoid costly missteps before they happen.]]> On Behalf of Oldham Law, PLLC <![CDATA[When contracts clash: Which terms have control in Texas?]]> https://www.lonestarbusinesslaw.com/?p=256617 2026-02-04T08:06:40Z 2026-02-04T08:06:40Z Businesses often move fast. They send quotes, purchase orders, and invoices without reading every line of the fine print. These can create problems along the way. It becomes even more complicated when each side uses its own contract form. Lawyers call this the battle of the forms. To decide which terms control the deal, Texas has rules in place for such situations. The succeeding information gives an overview of how the process works.

How the battle of the forms happens

A battle of the forms happens when two businesses agree to a deal but send documents with different terms. For example, a seller may send a quote with its terms. The buyer may reply with a purchase order that has different rules. Both sides may ship goods and pay invoices without noticing the conflict. Under the Uniform Commercial Code (UCC), businesses can still form a contract even if the forms do not match perfectly. However, the details of the final deal often depend on who sent the first offer and how the other side responded.

How Texas courts decide which terms control

The courts closely examine how the deal began. They often apply what many call the First-Shot Rule. Under this, the terms in the first document often become the contract. If the second document includes terms that conflict with the first, courts usually reject those terms. The first document often stays in control. If the second document adds extra terms that do not conflict, courts may include them if they do not materially change the deal. That's because a material change could surprise the other side or create unfair hardship. Conduct is also important. If the paperwork is messy but both parties acted as if a contract existed by shipping goods and paying invoices, courts may apply UCC gap-filler rules to fill in missing terms. Small details in emails or invoices can change liability limits or warranty terms. Therefore, businesses should always review incoming forms to confirm they match the original offer.

How reviewing contracts early helps

Contract disputes can become expensive and stressful. Many problems start long before anyone files a lawsuit. If the contract language is clear and forms are consistent, the risks also become lower. Speaking with a business attorney may help companies understand how Texas courts review their documents. Early review may help businesses spot risks and make informed decisions before disputes grow larger.]]> On Behalf of Oldham Law, PLLC <![CDATA[6 key elements of an independent contractor agreement in Texas]]> https://www.lonestarbusinesslaw.com/?p=256615 2026-01-09T08:49:55Z 2026-01-09T08:49:55Z You've just found the perfect graphic designer for your rebranding project. Their portfolio impressed you. The rates fit your budget. You're ready to start immediately. But then you remember you need a contractor agreement. You wonder what exactly should go into this document to protect your company. This situation happens to Texas business owners every day, and understanding the key elements of these agreements can save you from future headaches.

Understanding the contractor-employee distinction

But before you draft any agreement, you must understand a crucial difference. Independent contractors are not your employees. They control how they complete their work. They invest in their own business tools and equipment. They also face their own financial risks. This distinction shapes every element of your agreement and protects both parties. Now that you understand this fundamental difference, here are six specific components your agreement needs.

Six essential elements you need in your contract

With the difference between a contractor and employee clear, you can now create a detailed contract. Ensure your agreement includes these six important parts for clarity and legal protection:
  • Parties and intent: Clearly state the relationship as an independent contractor, not an employee, highlighting their business independence and risk.
  • Scope of work and deliverables: Specify the tasks, project milestones and expected results from the contractor.
  • Confidentiality clauses: Protect your proprietary information, trade secrets and client data from unauthorized disclosure.
  • Assignment agreement: Make it clear that your business owns the final work, designs or intellectual property the contractor creates during the project.
  • Payment structure: Outline how much you will pay the contractor, when you will make payments and your preferred payment method.
  • Dispute resolution: Describe how you will handle disagreements, using mediation or arbitration instead of expensive lawsuits.
These elements form a strong basis for working with a contractor. However, assembling them properly may require professional guidance.

Protecting your business with professional guidance

These agreements form the basis of your working relationship with contractors. A clear and detailed contract safeguards your business and avoids expensive misunderstandings. Thus, professional legal help ensures your contract includes all needed details and follows Texas law.]]>