Sharing any information about patients for any promotional purpose is protected by the HIPAA Privacy Rule, meaning written consent from patients is essential. Smith + Malek advises health care clients to create a waiver that all patients have the option of signing (or declining to sign) during the standard patient intake process. This allows patients to opt in to searches for specific patient data to be used in marketing materials. To avoid any HIPAA violations, health care organizations or providers should include the following items in a patient waiver if they seek to use patient information in marketing material.
As seen in the Idaho Business Review
The independence of business ownership doesn’t negate the need to have a team you trust in your corner, especially when it comes time to sell. There are four roles that are essential to fill as you prepare to sell your business.
Most business owners want to maximize the amount of money earned from selling what has often taken decades or a lifetime of hard work to create. A professional decision on paper can quickly become deeply personal, as business ownership is often a fundamental part of a seller’s identity. In many cases, a person or family’s life’s work is on the line. The team you put in place to help navigate this important transaction cannot be underestimated.
As a business attorney with a decade of experience helping clients through the decision to sell, I recommend you fill these four key roles with top-notch people who truly care about your future and are experts in their respective fields. Having a great team in place is essential to a smooth transaction.
Management. The business’s chief executive officer or president, the chief financial officer, and general counsel are the essential players in determining each step of the sale process, ideally preparing for sale up to two years in advance. These key internal leaders help select outside advisors, and they are responsible for marketing the business, performing due diligence; and ultimately negotiating a deal that benefits the owners.
Depending on your business’s size, other department heads from legal, accounting, finance, and human resources may be called upon to assist with what’s known as “the data room.” Before technology made it possible to host this “room” electronically, this was literally a room where all the paperwork related to the company or its assets was stored, including due diligence, negotiating the purchase or merger agreement (particularly the seller’s representations and warranties) and preparing the disclosure schedules. In every deal, the seller must tell the buyer that certain things are true about the assets or the company. We collectively referred to these items as the “representations and warranties.”
Attorneys. Most companies rely on general counsel as well as outside attorneys who are responsible for drafting and negotiating the transaction documents and coordinating the signing and closing of the acquisition. Your team of attorneys helps create and organize the data room for due diligence. Sometimes, a seller may need legal counsel in specialized areas, such as tax, intellectual property, antitrust, environmental, and labor and employment. Specialized counsel can identify and solve legal issues in order to protect the value of the company.
Brokers. Brokers help the seller identify potential buyers and market the business. An experienced business broker is essential to finding the right buyers. Brokers have access to different kinds of buyers, like venture capital firms, competitors, customers, and suppliers. Because a broker can reach a wider range of buyers than you can on your own, they can help the seller win a higher price. Brokers also help vet buyers so the seller doesn’t waste time talking to people who may talk a good game, but don’t have the resources to close the deal you want.
Accountants. Face it, not every business owner has the level of detail the best CPAs are known for. Sellers sometimes rely on outside accountants to clean up and prepare financial statements necessary for a successful transaction. The accountants review and test the financial projections that may be used for marketing the business before and after it is listed on the market. Buyers carefully scrutinize these financial statements and projections and will often ask for a reduction in price if and when they find errors, which is why yours should be airtight. The accountants you choose to work with should be able to identify and resolve any financial issues that arise during the due diligence. They participate in the preparation of the data room and need to be available for the buyer’s due diligence. When selecting an accountant or firm, make sure they have significant experience in mergers and acquisitions (M&A). The seller should also look at the firm’s rate of success in closing M&A transactions and their experience with selling businesses similar to the seller’s (in both size and industry).
At Smith + Malek, we pride ourselves in being not only experts in our field, but also top-notch human beings. We believe that personality fit and shared values are the foundation of all successful partnerships. With the right team is in place, the deal will go smoother and the sale price will be higher.
A right of first refusal gives the company and the other shareholders the opportunity to buy the shares before they are sold. This is how it works.
In Idaho, a corporation may be administratively dissolved by the Idaho Secretary of State for three reasons:
Failure to deliver an annual report by the date it is due;
Failure to have a registered agent for 60 days; and
Failure to let the Secretary of State know within 60 days that its registered agent has changed or resigned.
Idaho Code § 30-21-601. When the Secretary of State determines that one of the reasons for dissolution exists, it must give notice to the corporation. The notice may be hand delivered or mailed to the corporation’s office or registered agent. Idaho Code § 30-21-602(a). The corporation has 60 days to cure the problem. Id. If it does not, it is administratively dissolved.
After being administratively dissolved, the corporation continues to exist but it may not do any business other than “wind up its activities and affairs and liquidate its assets in the manner provided in its organic law or to apply for reinstatement under section 30-21-603, Idaho Code.” Idaho Code § 30-21-602(c).
A corporation that is administratively dissolved may apply for reinstatement within 10 years of being administratively dissolved. Idaho Code § 30-21-603(a). To be reinstated, the corporation must file an application that states the name, address, date of the administrative dissolution, and that the the issue has issue has been resolved. Idaho Code § 30-21-603(b).
If any fees, taxes, interest, or penalties are due, they must be paid before the corporation will be reinstated. Idaho Code § 30-21-603(c).
When a corporation is reinstated, the date of reinstatement “relates back to and takes effect as of the effective date of the administrative dissolution.” Idaho Code § 30-21-603(d). The corporation is treated as if it was never administratively dissolved. Id.
Deadlock in a closely held corporation stops a business in its tracks. Deadlock happens when a key decision can not be made because there is not enough votes to make the decision. This occurs most often in two situations.
Shareholders of closely held corporations should consider whether additional shares can be sold. A corporation is free to create and sell more stock unless there is something in writing saying it may not.
Shares in a closely held corporation are typically not marketable. Very few investors want to become a shareholder in a closely held corporation. This creates the problem of determining how a shareholder can get out of a closely held company at a fair price. One way to deal with this problem is a put right along with a right of first refusal.
Idaho Code allows the shareholders of a corporation to sign a shareholder agreement. Idaho Code § 30-29-732. A shareholder agreement may address many different aspects of corporate governance.