5 Tips to Keep Your Company out of Legal Trouble

Litigation is very expensive and can even cost you your business. Here are some pointers on
staying out of court.

1. Many business owners sign agreements without legal assistance, but it’s very important
to have an attorney review the contract beforehand. Why is that?
Every business owner looking at a contract must realize that the contract has been drafted to protect the party that has prepared the contract. So, if you are looking for office space and the landlord gives you a lease to sign, remember that the lease favors the landlord. The same is true for any contracts for goods or services that you are buying or if you are having someone perform any type of service for you. An attorney who reviews the contract for you before you sign it can point out the contract provisions that are detrimental to your interests and can negotiate changes in the contract or suggest negotiation strategies for you to try against
the other party. Once a contract is signed by both parties, you are bound by the terms of the contract as it was signed.

2. How can a company avoid one owner leaving the other with all of the company's
debts and problems?
This is such a common situation when two friends start a business together. They figure that their friendship will overcome any questions that come up about how to handle company business. Every limited liability company or corporation should have an operating or shareholders' agreement.

3. What’s the basic information to include in an operating or shareholders' agreement?
All operating or shareholders' agreements should discuss how much and what each owner will invest in the business, how much time each partner will invest in the business, whether full-time or part-time, how the profits and losses will be divided (which may or may not correspond exactly to percentage ownership interests), and what will happen when one owner wants to leave the business or dies.

4. There are all types of liabilities that undermine a business, especially when a company isn’t insured. What type of insurance does a mortgage company need?
A mortgage company will need property and casualty insurance to protect business equipment, furniture, and files, workers’ compensation if they have employees at the workplace, and automobile insurance on all of the company cars. They will also need something called errors and omissions insurance which will protect your company when a loan officer or processor makes a mistake or does something he/she shouldn't have. A mortgage company should consult an insurance agent to find out the types of insurance that it will need for its business.

5. What should a business owner look for in an attorney when searching for one to provide general business advice?
Just like doctors have become specialists, attorneys have also become specialists. A business owner wants to find an attorney who specializes in business law. And if that business owner has a small business, he or she wants to find an attorney who is knowledgeable about small business, not large corporations. Business owners should start with the lawyers they know or ask the businesses they admire who they use as their business attorney. Also use a specialist when having mortgage-related problems. They know your industry better than a general-practitioner.

Changes to Massachusetts Licensing Regulations

Massachusetts' regulations regarding industry experience have changed.

Previously, there was no explicit standard about industry experience requirements. The Division of Banks evaluated each applicant's experience and decided whether the applicant could be trusted to comply with state and federal statutes and regulations concerning the mortgage process.

Now, mortgage brokers must show 3 years of full-time or the equivalent in part-time mortgage industry experience. The experience can be gained by working as a mortgage broker in another state, or working for another mortgage broker or lender or bank in Massachusetts. You don't get any credit for working for an unlicensed broker or in an unlicensed branch office.

An applicant for a mortgage lender license must show 5 years of full-time mortgage industry experience, likewise gained by working as a mortgage broker in another state, or working for another mortgage broker or lender or bank in Massachusetts.

Branch managers must show 3 years of full-time mortgage industry experience.