The Cummings & Cummings Law Journal

Why Non-Compete Enforcement in Franchise Systems Is Uniquely Complex Non-compete provisions in franchise systems are not generic boilerplate. They are carefully engineered restraints intended to protect a franchisor’s brand goodwill, trade secrets, and system know-how after a franchisee exits the network or breaches. Unlike employment non-competes, franchise non-competes often arise in the context of the

Understanding What a PPM Really Does in an Angel Round A Private Placement Memorandum is not a pitch deck dressed in formal language. It is a legally significant disclosure document designed to mitigate anti-fraud risk under federal and state securities laws, to frame the terms of an exempt securities offering, and to present investors with

Understanding the Irrevocable Life Insurance Trust Structure An irrevocable life insurance trust (ILIT) is a specialized estate planning vehicle designed to own and control life insurance outside the insured’s taxable estate. When drafted and administered properly, the ILIT can remove the death benefit from the insured’s gross estate under Internal Revenue Code sections affecting incidents

Defining Domestic Partnerships for Benefits Purposes Domestic partner benefits sit at the intersection of tax law, employment law, and employee benefits administration. Contrary to common assumptions, there is no single, universal definition of a “domestic partner” for all purposes. Employers, insurers, and state laws may each apply different criteria to determine eligibility. As a result,

Understanding “Re-Domestication” from a Foreign Jurisdiction to the United States “Re-domestication” is commonly used to describe relocating a legal entity’s jurisdiction of formation from a foreign country to a U.S. state. In U.S. legal parlance, the most comparable mechanisms are domestication, conversion, or continuance under state statutes, or, in the absence of those options, cross-border

Understanding UCC Article 6 Bulk Sales and Modern Successor Liability When parties contemplate a sale of substantially all assets of a business, they often underestimate the legacy concept of UCC Article 6 bulk sales and the modern web of successor liability regimes that have evolved as Article 6 has been revised, limited, or repealed in

Understanding the Two Federal Partnership Audit Regimes The Tax Equity and Fiscal Responsibility Act (TEFRA) and the Bipartisan Budget Act (BBA) represent two distinct federal partnership audit regimes that determine who the Internal Revenue Service examines, how adjustments are computed, and who ultimately bears the economic burden of tax. Under TEFRA, the audit centered on

Understanding the General Assignment for the Benefit of Creditors A General Assignment for the Benefit of Creditors, often abbreviated as an ABC, is a state-law alternative to a formal bankruptcy designed to liquidate a distressed company’s assets, centralize creditor claims, and distribute proceeds in an orderly manner. In an ABC, the company (the assignor) transfers

Understanding What a Publicly Traded Partnership Is and Why It Matters for Taxes A publicly traded partnership (PTP), often referred to as a master limited partnership (MLP), is a partnership that trades on national exchanges yet generally retains pass-through tax treatment. Unlike a corporation that issues a Form 1099-DIV and pays entity-level tax (unless it

Inbound vs. Outbound Transactions: Why the Distinction Drives Tax Outcomes In international tax, the difference between inbound transactions and outbound transactions is not merely semantic; it is the organizing principle that determines who is taxed, on what income, when, and at what rate. Broadly, inbound transactions involve non‑U.S. persons investing in or doing business in

Understanding “Related Party” Status Under Federal Tax Law Before drafting a lease between entities you control, it is essential to determine whether the parties are “related” under federal tax law. The rules do not rely on a common-sense notion of control. Instead, the Internal Revenue Code (IRC) and its regulations employ multiple overlapping attribution and

Real estate syndication rewards meticulous structuring, and a limited partnership is often the backbone of that structure. When the paperwork is clear, taxes are anticipated, and responsibilities are divided, the result is greater investor confidence and defensible outcomes under audit or litigation. Conversely, casual drafting or “off-the-shelf” templates can misalign economics, invite securities or tax

Understanding What Constitutes a Corporate Endorsement of a Negotiable Instrument A corporate endorsement, sometimes spelled “indorsement” under the Uniform Commercial Code, is far more than a quick signature or a rubber stamp on the back of a check. In legal terms, an endorsement is a signature made on an instrument for the purpose of negotiating

What Constitutes a Complete Liquidation of an S Corporation A complete liquidation of an S corporation is not merely a cease in operations or a final dividend. It is a formal process in which the corporation winds up its affairs, settles liabilities, and distributes all remaining property to its shareholders with the intent to terminate

Why Email Communications Qualify as Business Records Email is not casual correspondence in the eyes of the law. It is, in many circumstances, a business record that documents negotiations, approvals, orders, contracts, tax positions, and compliance activities. Courts frequently treat emails as contemporaneous writings that reflect the ordinary course of business, and regulators expect companies

What a “Waterfall” Really Is in a Private Equity Fund In private equity, a waterfall is the contractual sequence that governs how cash and securities are distributed among investors and the fund sponsor after portfolio realizations. It is not a single formula, but rather a series of accounting and economic rules layered together: capital return

Understanding the Rents, Issues, and Profits Clause: Definition and Purpose The Rents, Issues, and Profits clause is a standard provision in commercial and multifamily mortgage documents that grants the lender an interest in the income generated by the real property. At its core, this clause allows a lender to capture cash flow derived from the

Distressed Debt Fundamentals: What You Are Really Buying Distressed debt refers to credit instruments trading at a substantial discount to par due to issuer-specific financial stress, market dislocation, or structural subordination. In practical terms, an investor is purchasing a combination of legal rights: contract claims to principal and interest, remedies upon default, and negotiation leverage

What Restrictive Covenant Agreements Are in Mergers and Acquisitions Restrictive covenant agreements in M&A transactions are contractual promises designed to protect the value of the business being acquired. They typically include a combination of non-compete, non-solicitation, confidentiality, non-disparagement, no-hire, and invention assignment covenants. Although these covenants often appear as standard provisions tucked into a purchase

Understanding What a Non-Grantor Irrevocable Trust Is and Why It Matters A non-grantor irrevocable trust is a fiduciary structure that, when carefully drafted and administered, stands as a separate taxpayer under federal and state law. Unlike a grantor trust, where the creator of the trust (the grantor) is treated as the owner of the trust