36:28: I’m engaging with a business that has a diverse vendor certification, such as woman-owned, minority-owned, or veteran-owned business status, which I won’t qualify for as the new owner. One specific customer of this business is a large public company that tracks and reports spend with diverse vendors in a public annual report. The current owner/seller suggests that this client has never brought up the status with this customer, and there’s no specification in their customer contract regarding this certification. Are there any ways to validate whether this big customer knows about the certification and whether it matters to them? Are there ways to protect me if the customer decides to stop doing business with me because of the lost certification? We can’t do the obvious, which is approach the customer directly about this specific issue, as the seller prefers not to raise this particular point but rather keep it broad.

38:59: I’m pursuing a business that currently has four owners. One of them was issued 15% equity as an owner-operator incentive. Are you guys saying that because this key employee is a part owner, he wouldn’t be able to stay on as an employee post-close?

41:32: Is there any kind of fancy footwork where the existing other owners could buy him out first? Is there a look-back period?

42:47: Do you guys have any recommendations for environmental assessment firm vendors?

43:37: I’m currently in due diligence, and the sellers are paying regular staff—their GM and their front desk customer service staff—as 1099s. We know we’ll need to convert them to W-2s when we take ownership of the business. Does that have to be done from day one, or do we have a little grace period to effectuate that shift from 1099 to W-2?

45:54: Employees can be more receptive to a change if you do it early on, as part of all the commotion of a transition. Generally, though, should employees, to the extent they’re paying attention, treat it as good news—an upgrade—to go from 1099 to W-2, is it not?

47:56: Are you guys also highlighting why an employee might not like going from 1099 to W-2, because the paycheck they receive will be a lesser number since taxes will be withheld?

48:31: Did you already say that if there is a gross misclassification of employees here, we should put it on the seller to fix before proceeding with the deal? Why is that not a tactic?

50:41: Did you guys say that all of the unpaid taxes related to misclassification of employees carry through to you as the buyer, even in an asset sale, as a rule?

52:26: Might non-competes be requested by the buyer from the seller for a key employee or key employees prior to close, if such non-competes were not previously in place?

56:18: What about international employees—essentially 1099s—who don’t receive 1099s but are full-time persons who, according to many U.S. states, would check the boxes of effectively being an employee, but they’re abroad? Is that just outside of the jurisdiction?

58:34: I’m not supposed to be paying Social Security for my foreign workers, am I right?

59:28: James, David, was there some reason you didn’t want to mention the vendors—the kind of SaaS company service providers—who will do all this compliance stuff for you if you’re not using the employer-of-record model?