Do it Right From the Start: Business Agreements Among Co-Owners
Oftentimes, partners are so excited and optimistic about building their business that they overlook this important document. My experience has shown that partners who are long-time friends or family may be most in need of a document that sets forth their rights and obligations toward one another. Even the closest of relationships can go south and frequently do.
Among the conventional circumstances that need to be addressed in these agreements are the death or incapacity of a partner, divorce, and what happens if a partner wants to sell all or a part of their interest. I have found, however, that the more common and realistic factors that plague business relationships are spousal influence and the entrance of children into the business.
A shareholders’ agreement or operating agreement should not be taken for granted. These types of agreements should be prepared at the onset of the business – and not just the stock one that comes with your corporate kit. Without one in place, co-owners of a business could end up in bitter litigation, costing thousands of dollars, with, perhaps, all of the co-owners losing and the business devastated at the end of the day.
If you don’t have a shareholders’ agreement or operating agreement in place, it’s not too late. I urge you to have one put together before problems can potentially destroy your relationship and business.
Don’t be the type of business owner who comes to me after problems arise and says:
- “I know we should’ve had a shareholders’ agreement.”
- “Things were so good. I can’t believe he (or she) is doing this.”
Greed, money and a sense of unfairness have a way of changing people. You can’t afford to procrastinate.
Do it right from the start or get it right now. Call Levine Law, LLC at (516) 921-6700.
Tel. (516) 921-6700