The Cummings & Cummings Law Journal

Understanding the “Drag-and-Drop” Signature: What It Is and Why It Matters A “drag-and-drop” signature typically involves selecting a stylized rendering of a name, initials, or symbol within a software interface and placing it onto a document to indicate acceptance. In many platforms, the user drags a signature field into position and applies a signature artifact

Understand What a Purchase Money Security Interest Is and Why It Matters A Purchase Money Security Interest (PMSI) is a form of security interest that gives a lender or seller super-priority in specific collateral when the credit extended enables the debtor to acquire that very collateral. In practical terms, a PMSI can leapfrog an earlier

Understanding What a Key Person Insurance Policy Is—and Why Partnerships Need It Key person insurance is a life or disability insurance policy that a business acquires on the life of a critical owner or employee whose loss would materially affect the enterprise’s revenue, credit relationships, or operational continuity. In a partnership, the financial dependence on

Understand What “Conversion” Really Means for Tax Purposes From a tax perspective, “converting” a partnership into a single-member limited liability company is not a single, uniform event. It is a sequence of legally distinct actions that the Internal Revenue Service analyzes under specific partnership and entity classification rules. A multi‑member LLC taxed as a partnership

Understanding a Partial Deficiency Sale in a Secured Transaction A partial deficiency sale arises when a secured party disposes of some, but not all, of the collateral and the net proceeds do not fully satisfy the secured debt, leaving a remaining balance known as the deficiency. This scenario often occurs when collateral consists of multiple

Understanding “Complete Liquidation” For An S Corporation A “complete liquidation” of an S corporation is not a single act; it is a sequence of deliberate steps in which the entity winds up operations, sells or distributes all assets, settles all liabilities, and terminates its legal existence under state law. In tax terms, a complete liquidation

Understanding Appraisal Rights: What They Are and Why They Matter Appraisal rights, often called dissenters’ rights, allow certain shareholders who disagree with a fundamental corporate transaction to demand a judicial determination of the fair value of their shares and receive cash in that amount instead of the deal consideration. These rights exist primarily under state

Understanding Deal Structure Choices Drives Tax Outcomes Private equity buyouts are often described in shorthand as either “asset deals” or “stock deals,” but the tax reality is considerably more nuanced. The classification of a transaction as an acquisition of assets, equity, or partnership interests establishes the legal and tax framework for every other decision, including

Understanding the Unique Tax Landscape for Stock Option Grants to Nonresident Alien Contractors Granting equity to nonresident alien contractors is deceptively complex. From the standpoint of an attorney and CPA, I caution founders and finance leaders that the U.S. tax rules intertwine compensation sourcing, withholding regimes, treaty claims, and securities compliance in ways that are

Understanding Tax Residency Versus Immigration Status Tax residency is the keystone of international tax analysis for digital nomads, yet it is frequently misunderstood. Immigration permission to stay in a country (for example, a tourist visa or visa waiver) does not determine whether that country considers you a tax resident. Instead, tax residency is typically defined

Understanding the Narrow Circumstances Under Which Bearer Shares Remain Permissible Bearer shares are equity instruments where legal title rests with the possessor of the physical certificate, historically enabling anonymous ownership and frictionless transfer. While this feature was once marketed as efficient and confidential, it is now broadly incompatible with contemporary anti–money laundering and tax transparency

What a Joint and Several Liability Clause Means in Practice A joint and several liability clause authorizes a creditor to hold any one co-obligor responsible for the entire obligation, regardless of internal arrangements among the parties. In essence, each obligor promises to shoulder both the collective liability and the individual liability of the group. This

Understand the Regulatory Framework Driving Beneficial Ownership Certifications A beneficial ownership certification for a commercial loan is not a mere administrative form; it is a compliance instrument designed to help financial institutions satisfy customer due diligence obligations. Banks, credit unions, and nonbank lenders are required to identify and verify certain individuals who ultimately own or

Understanding the Reverse Morris Trust Transaction A Reverse Morris Trust transaction is a sophisticated, tax-efficient method for a parent corporation to divest a business line by combining a tax-free spin-off with a strategic merger. Properly executed, it permits the parent to separate a business on a tax-free basis under Section 355 and concurrently merge that

What a Restructuring Support Agreement Is and Why It Matters A Restructuring Support Agreement (RSA), sometimes called a “plan support agreement,” is a binding contract among a debtor and key stakeholders to support a specified restructuring path in a Chapter 11 case. At its core, an RSA frames the “deal” that will be implemented through

Understanding the Modern Landscape of Restrictive Covenants Restrictive covenants in employment agreements—such as non-compete, non-solicitation, and confidentiality provisions—occupy a legally sensitive intersection of contract, employment, and trade secret law. The enforceability of these provisions depends upon state-specific statutes, evolving case law, and, increasingly, federal scrutiny. What appears to be a “standard” clause copied from a

Understanding the Nature of Partnership Liability At its core, a partnership is not simply a cooperative venture between colleagues. It is a legal relationship that creates joint and several liability for the partners in a general partnership. This means that a single partner may be responsible for the full amount of partnership debts and obligations,

Understanding Shareholder Deadlock: What It Is and Why It Matters Shareholder deadlock is not merely a disagreement. It is a sustained inability of the corporation’s owners or directors to secure the required votes to make decisions on matters central to the company’s operation, financing, or strategy. In closely held companies with two equal owners, deadlock

Understand the Purpose and Regulatory Context Director stock ownership guideline policies are designed to align the long-term economic interests of directors with those of shareholders. The policy signals that directors have meaningful “skin in the game,” that they experience both upside and downside, and that they steward capital with personal accountability. While this concept appears

Understanding the Purpose and Structure of a Tri-Party Agreement in Construction Financing A tri-party agreement in construction financing is a negotiated contract among the owner (or developer), the lender, and the general contractor that aligns payment mechanics, performance obligations, and remedies across all parties. Although many stakeholders assume that the construction contract and the loan