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Education

When conflicts occur, it's critical for the parties involved
to have independent legal representation. Also, it may
be necessary to involve both an expert in the conflict
(for example, a divorce lawyer) and a payments industry
lawyer to guide the parties through the conflict without
Legal ease: damaging the ISO business.
Divorce

Mixing family and an Spouses are rarely equally involved in an ISO business.
Whether the wife or the husband takes the lead, one is
rather more involved in the business than the other. When
ISO business divorce happens, the ISO business is subject to significant
strain. Often, the strain is so great that the business dies
as a result.
By Adam Atlas First, the spouse who is less involved might wish to claim
Attorney at Law value for a portion of the business. This triggers a dispute
over valuation. It's one thing to read about sales of ISO
or better or for worse, family members often businesses at 50 times monthly residuals; it's another
work together in an ISO business. As with other thing to prove to opposing counsel or a court that the
partners, relatives bring certain legal consider- ISO business is worth one amount or another. Family
F ations to an ISO. The purpose of this article is to businesses sometimes operate at a loss – on paper. This
highlight some of those. can be infuriating for the party claiming value from the
Trust ISO business, because the party seeking to lower the value
can bank on filings made by the company.
Other than familiarity, trust is, perhaps, the main asset
family members bring to an ISO business. Many families Second, divorce proceedings are often rife with distrust.
run ISO businesses together without putting thought This is detrimental to a business that requires a high level
into the usual paperwork because they are able to build of trust to succeed. For example, the party claiming value
on trust. As a lawyer, I have to remind readers that, even might think that the other party is dishonestly placing
among family, basic paperwork is recommended. merchants with a third party to hide value. Whether or
not this is actually happening, potential for this exists in
The key legal building blocks to a business, including an every ISO, which makes divorce proceedings involving an
operating agreement, non-solicitation agreements, agent ISO business more testy than those over another kind of
agreements and employment agreements, could all add business.
value down the road between family members – if only
to remind people of the deals they have made with each Starting the business with a basic legal framework and
other. good clean records can go a long way toward lessening
conflict brought on by divorce.
Sometimes asking for things in writing does more harm to
familial relationships than not having anything in writing. Planned succession
That said, I recommend confronting the formalities early There are many examples of ISO business owners who
in the life of the business to avoid surprises down the bring children on board to assume ever greater roles over
road. Trust is not always enough; it's also subject to break time and eventually take over the business. This process
once in a while. requires mentorship by the parent, trust on both sides and

Legal representation planning.
Subject to suitable waivers of conflict of interest, a single
lawyer can draw up an operating agreement and even other A partner reaches out to us to describe a
'starter' documents for a family ISO business. However, problem or challenge their client has. We
remember that each person is entitled to independent work with the partner to get the right amount
representation, and getting some independent advice is of responsible capital they need to help
often helpful, even if there is a high level of trust. Some fulfill the dream or meet the financial goal. In
family members will not want to appear as distrustful,
and they will then hire a lawyer to advise them from the process, we also enable the partner to serve
behind the scenes so as not to damage family relations. one of their longtime clients: it is a win-win all
around and very rewarding.

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