I truly appreciate the entrepreneurial spirit and enjoy participating in a client’s business venture from inception, through growth spurts and to new directions. Our agreements are drafted to memorialize the partners’ business plan and provide for the eventual twists and turns of owning a business. When I first meet with clients on a new business venture, we invariably discuss one or more of the following ten topics. ~Michele A. Murphy
Ten Common Issues for business partners to consider, discuss, decide and document:
- Do we form an LLC, Sub S Corp or partnership? What are the state licensing laws applicable to my business? Do I need to publish? File for Authorization to do Business in New York?
- If the business needs an infusion of capital, do we want the right to demand that a partner contribute funds? What happens if a partner cannot contribute capital when a call is made? Do we dilute his/her shares? Make a loan to his/her payable over time? Buy him/her out?
- Who is responsible for the management of the company and what restrictions can we place on their authority to act?
- If my partner dies, do I want to be a partner with his/her spouse? What does our agreement say about this?
- When can a creditor “pierce the corporate veil” and access our personal assets? How do we keep good and regular business records? What kind of insurance is available to protect the company?
- I am giving the new business money or property. Is it a loan or is it capital contribution? Do you know a good accountant?
- We have two partners, how do we break a tie when we disagree on a major decision?
- When should we allow a partner to sell his/her shares? Can the company buy back his/her shares?
- We have developed a trade name, logo and goodwill. How do we protect it from unlawful trademark infringement?
- Our company is buying a building. Should we form a separate company to own it?