What is an exercise price?

In exchange for services or as a form of compensation, stock options will be granted to both clients and employees. While these stock options do not have immediate cash value, they have an instrinsic value that materializes over the life of the stock option.

The value of that option for an employee or client is partially determined by the exercise price. This price, which is also known as the strike price, is the price at which an employee may purchase stock in the company at a future date. 

The value of this stock to an employee or client is usually equal to the difference between the exercise price and the market price at the time of purchase. This difference typically represents how much the employee or client can gain by selling the stock. 

If you or anyone you know has questions about your stock options, contact the Des Moines business transactions lawyers of LaMarca Law Group, P.C., at (877) 327-2600. 



Iowa named one of the best cities for business

Des Moines was named America's best city to do business by a MarketWatch survey. According to ABCnews.com report, the Iowa city was included along with Washington D.C., Omaha, and Minneapolis/St. Paul.

The survey looked at about 100 cities and examined the unemployment rate and the business climate in various cities. According to MarketWatch, Des Moines was cited for its continuous growth and ability to attract a number of new businesses in the financial and insurance sectors. 

If your business has questions about its business transactions, contact the Iowa business transactions lawyers of LaMarca Law Group, P.C., at (877) 327-2600.



Can companies engage in related entity transactions?

Related entity transactions are defined as transactions between a corporation or owners of a corporation and another corporation or owners that are affiliated with the former corporation. Affiliation is usually determined by the percentage of ownership between corporations and their owners.

While related-entity transactions typically come under scrutiny, they are allowed in most circumstances. However, when they occur,  they must be approved by the Board of Directors, approved by auditors, and disclosed to the public. 

While these rules apply especially to public companies, they can also have implications for private companies. For instance, private companies engaging in related-entity transactions will be scrutinized by lenders and investors. 

If your business has questions about its related-entity transactions, contact the Des Moines related-entity transactions lawyers of LaMarca Law Group, P.C., at (877) 327-2600. 



What is the "character" of a business transaction?

Many companies will cite the character of their business transactions. When they cite this, they are usually discussing the transaction’s gain or loss type.

In other words, the character will likely either be a capital gain or loss. Also, it will describe whether the gain or loss was short term or long term.

If you or anyone you know has questions about the character of your business transactions, contact the Des Moines business transactions lawyers of LaMarca Law Group, P.C., at (877) 327-2600.



What is "substance over form" in business law?

Many legal rulings concerning business transactions cite the substance over form doctrine. This legal doctrine is usually employed when a business transaction may appear to be legal but actually contains illegal elements.

For instance, if a corporation owned primarily by one shareholder pays the shareholder's child a substantial salary for little or no work, then the court will likely not regard this compensation as salary. Instead, the court will determine that the compensation is a constructive dividend by virtue of the substance over form doctrine. 

If you or anyone you know has questions about your business transactions, contact the Iowa business transactions lawyers of LaMarca Law Group, P.C., at (877) 327-2600. 



Why some businesses prefer operational leases

When businesses choose to lease their assets, they often must decide whether to structure the lease as a capital lease or operational lease.

In most cases, businesses prefer operational lease arrangements because they can keep the asset on their books. Structuring an operational lease, however, can be difficult.

To do so, businesses must ensure the lease arrangement meets a number of requirements. For instance, the lease life cannot be longer than 75 percent of the useful life.

If your business has questions about how to structure a lease arrangement, contact the Iowa business transactions lawyers of LaMarca Law Group, P.C., at (877) 327-2600.



Tax implications of related-party transactions

Many companies structure their transactions to pay maximize their after-tax cash flows. However, tax avoidance strategies often have some restrictions.

For instance, to avoid some taxes, the transaction must occur as an arms-length transaction. These transactions usually take place in the open market place, in which both parties negotiate to a competitive market price.

Transactions that do not meet the arms-length transactions requirement include transactions between related parties. In such transactions, the two parties have some relationship that allows one party to negotiate a sale that would not occur in the marketplace.

The IRS will typically investigate related-party transactions to determine if they were structured in such a way that unfairly gives one party a tax advantage.

If your company has questions about tax-related transactions, contact the Des Moines business transactions lawyers of LaMarca Law Group, P.C., at (877) 327-2600.



How to structure a large asset purchase

For many businesses, their biggest costs are related to their office space. Determining how to structure this cost, however, is not always simple.

For some companies, it may be in their best interest to buy their office outright. If they do this, they can expense the building as an asset over the useful life of the asset. 

For other companies, they may prefer to rent the building and expense it according to their lease agreements. The decision, however, may not always be controlled by the company. In some cases, they are required to expense the asset as an operating or capital lease. 

If your building has questions about the legal consequences of a large asset purchase, contact the Iowa business lawyers of LaMarca Law Group, P.C., at (877) 327-2600. 



iPCS files transactions lawsuit against Sprint

iPCS, Incorporated filed a complaint against Sprint Nextel Corporation Sept. 10. The complaint concerned three of its subsidiaries, which alleged that Sprint's recent acquisitions were the result of uncompetitive practices, a potential future break of a contract agreemtn, and illegal competitive practices against the subsidiaries that hold an agreement with Spring.

The three complaints essentially seek to enforce iPCS Affiliates' Agreements with Sprint. The three subsidiaries are asking for an injunction against Sprint until the company complies with the terms of the agreements. 

If your business is seeking complaints against companies with which your company holds transaction agreements, contact the Des Moines transaction lawyers of LaMarca Law Group, P.C., at (877) 327-2600



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