Instructor(s) Gehl, Michael
The course focuses on the role of the lawyer as an advisor to closely held businesses and their owners. Numerous case studies are used to expose the student to a broad range of structural planning issues and the practical and analytical challenges of the planning process. There is a heavy emphasis on planning traps and creative planning strategies. Different types of closely held businesses are analyzed, compared and contrasted in case studies that raise important issues in co-ownership planning, enterprise funding, owner compensation, structuring profit and capital interests, profit distribution planning, exit and business transition planning, key executive planning and employee relations and benefits. Numerous drafting considerations and implementation mechanics also are reviewed. The course is designed to broaden the student’s substantive knowledge on a broad range of issues and to help the student develop three essential planning skills: (1) the ability to identify and address business objectives, not just legal issues; (2) the ability to evaluate and apply specific strategic options; and (3) the ability to effectively communicate with non-lawyers. The text used contains case studies and related problems, as well as resource materials which provide students with background information required to evaluate and develop solutions for the problems. Due to the broad scope of topics covered by the problems, the reading assignments (all of which are in the text) are relatively extensive. Each student will be assigned two of the problems and will be required to (1) participate in a role play exercise with the instructor with respect to each problem (with the student playing the role of lawyer) and (2) write a formal legal memorandum to the instructor (assuming he is a partner in a law firm who has assigned the problem to the student) with respect to the second problem, analyzing the problem and discussing proposed solutions. The role play exercises and memos are graded and constitute 25% of the student’s course grade, with the final exam constituting 75%. Prerequisites: Business Organizations I and Taxation I (or equivalent undergraduate or graduate level basic income tax course). Also, for students who have not had Tax I, required summer reading in Tax topics may be substituted: contact Jane Heymann at email@example.com for list of required reading.
By the end of the course, students should be able to:
Identify and prioritize client strategic business and tax objectives.
Understand key business, financial and tax terminology.
Know how to communicate with clients to:
Elicit information necessary to identify and prioritize client objectives
Advise clients regarding choice and implementation of strategic planning options at a level understandable by clients
Be able to write a legal memorandum to a law firm partner analyzing various strategic planning options available to address a client’s objectives and recommending the preferable option
By the end of the course the student should know:
Different types of business entities and which entity is best suited to address a particular client’s needs from standpoint of owners relationship, operational and tax objectives and exit strategies
Documents used to organize each type of entity and establish relationship among owners and key drafting issues for such documents
Different types of financing used to capitalize private businesses and the tax and non-tax advantages and disadvantages of each type of financing
How to do basic tax planning for different types of business entities
How businesses are bought and sold, including different deal structures, tax effects of different deal structures and deal documentation
Key elements of executive employment agreements
How deferred compensation works
How stock and stock equivalent rights can be used to compensate key executives
Key issues in family business transition planning, including transfer of control, financing and tax minimization
Basic structure of estate plans for private business owners and how multiple entities can be used to achieve estate planning goals