Tennessee Business Relief Program
The Tennessee Business Relief Program was implemented in early June to reimburse small businesses for costs incurred as a result of the mandatory closures due to COVID-19. The program will be funded through Tennessee’s Federal Coronavirus Relief Funds and is expected to distribute around $200,000,000 in funds to over 28,000 qualifying businesses. No application is required to be eligible for the Tennessee Business Relief Program because eligibility is based on whether the business collects sales tax or pays business tax. On average, the eligible businesses have annual gross sales of $500,000 or less. Businesses are eligible for the business relief program
Force Majeure
As the economic impact of the coronavirus pandemic is felt globally, many businesses are struggling to perform their contractual obligations, despite their best intention. While many businesses have been forced to suspend operations, those businesses need to consider their contractual obligations arising during this interruption of operation. Businesses need to contemplate how they will manage the impact of the crisis, what mitigations are available, and what remedies might be available. A common contractual issue that a business currently faces is suspending or terminating a contract. Many contracts include a force majeure clause. Force majeure clauses cover situations that are beyond the
Paycheck Protection Flexibility Act
On June 3, 2020, Congress passed the Paycheck Protection Flexibility Act, which marks the beginning of a second wave of Coronavirus related legislation expected to come out of Washington. The Act modifies several provisions of the Paycheck Protection Program originally implemented under the CARES Act in March. The goal of the Act is to create more flexibility within the forgiveness system in order to allow borrowers to achieve full or almost full forgiveness for their PPP loans. Most significantly, the Flexibility Act will allow businesses who have already received funds to extend the covered period from 8 weeks to 24 weeks.
Ways to Help Your Small Business During COVID-19; Application for Forgiveness of SBA Payroll Protection Program Loans
On March 27, 2020, the CARES Act became the first stimulus-relief package passed into law, which in part is able to provide $376 billion in relief for Americans and their small businesses. In addition to traditional SBA funding, the Act offers temporary programs directly related to Coronavirus relief. The Paycheck Protection Program (PPP) allows small businesses to keep their employees on payroll by funding eight weeks of payroll, rent, mortgage interest, and utilities. If the business only uses the funds for these reasons, then the SBA will forgive the loan. To receive partial or even full forgiveness of the PPP Loans,
Opportunity for Remote Notarization and Witnessing During COVID-19
In an effort to reduce the spread of the Novel Coronavirus 2019 (COVID-19), Tennessee Governor Bill Lee issued Executive Order No. 26 (“the Order”) authorizing the use of remote notarization and remote witnessing through May 17, 2020. In relevant part the Order allows all Documents which require the physical presence of a notary and/or witnesses to now be executed through the use of remote notarization and remote witnessing. An applicable Document for this Order includes a will, trust, living will, durable power of attorney, deed, or other legal document requiring witness or notary presence. The new guidelines allow for execution to
Buying a Pig in a Poke
In a recent Tennessee Court of Appeals case, the primary dispute was whether a real estate agent had properly advised a seller to disclose that a home had a log construction. In Oliver v. Pulse, the sellers sold their home which was constructed of logs. The sellers renovated the home and had covered the exterior with vinyl siding and the interior with sheetrock. The sellers informed the listing agent of the renovations, but did not disclose those facts on the residential property disclosure. The buyers did not have a home inspection completed before the purchase. The first lawsuit arose when a
An Ounce of Prevention is Worth a Pound of Cure
In describing an odd Limited Liability Company (“LLC”) formation that ended in a court battle, the Tennessee Court of Appeals stated that “[a]s was the case with Alice in Wonderland, the evidence reveals that the parties wanted to go “somewhere,” and as the Cheshire Cat explained, if you want to go somewhere, ‘you’re sure to do that, if only you walk long enough.’” In Parigin v. Mills, the parties successfully formed an LLC. As the Tennessee Court of Appeals explained, the parties started-off on the right foot by hiring a lawyer, but the parties failed to consult with the lawyer when prospective
Thinking of Organizing a Business?
The Consolidated Appropriations Act, 2016, Pub. Law 114-113, extended, indefinitely, the 100% exclusion from tax of the proceeds from the sale of qualified small business stock, Int. Rev. Code §1202. Briefly, a taxpayer, other than a corporation, can exclude, from federal income tax, 100% of the gain from the sale or exchange of stock which is held for more than five years. The stock must have been issued by a qualified small business and engaged in a "qualified trade or business." The exclusion was originally set to expire. Most new small businesses formed locally are likely to be a
Special Taxation Districts: Use with Care
Business communities looking to improve their infrastructure may consider funding improvements through special taxation districts. These districts go by different names in different states: Special Service Areas, Community Improvement Districts, or—in Tennessee—Central Business Improvement Districts. The basic idea is that property owners create a district and levy a special tax on the properties within the district. The tax revenue is then used to fund improvements, but only improvements within the district. In some versions, the improvements are funded by bonds, and the tax revenue is used to retire the debt. The district is often dissolved after the debt is retired. Special
Contract Provisions
Contracts contain provisions frequently and unfortunately dismissed as "boilerplate." "Boilerplate" comes from the newspaper business and originally referred to metal sheets produced regionally or nationally and shipped to local newspapers for use on local presses without change. "Boilerplate" now describes standard contract provisions which can be changed only with difficulty. An integration or merger clause is frequently found among a contract's "boilerplate" provisions. Particular wording varies, but the integration clause states that the terms in the written contract are the final agreement and the written contract supersedes prior negotiations, representations, or agreements. The integration clause limits the introduction of "parol" evidence