Many business owners have “unwritten rules” governing how profits are divided, how management responsibilities are delegated, and so forth. Although these informal arrangements are not necessarily a negative thing, if disagreements arise between company owners and there is no governing document in place, this could lead to unnecessary tension and disputes. Therefore, we recommend that even small companies owned by as few as two individuals should consult with a lawyer who can provide advice and insights into structuring a fair agreement that adequately addresses the rights and obligations of all parties.
For corporations, this takes the form of a shareholders’ agreement, and for limited liability companies the proper document is an operating agreement. For two or more companies working on a project, a joint venture agreement is the document typically utilized. Each of these documents has unique features which can best be explained by an experienced attorney – one who can make the various terms and conditions easily understandable by translating complex “legalese” into layman’s terms.
We also advise our clients on how to maintain best practices in corporate governance.