Creating Governing Documents
If you are starting a business, an attorney can help you create and memorialize the rules and processes establishing how your company will be controlled and directed. This is broadly referred to as your company’s corporate governance. Your company’s corporate governance will be set out in a collection of governance documents that come in different forms for different types of entities. These documents each perform different functions, but the overall goal of clearly delineating the operating rules of the entity is the same.
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Organizing Documents and Agreements
Corporate governance is critical to the smooth functioning of any business. Working with an attorney to create an agreement among owners specific to your entity’s form can provide a clear basis for operating the business and resolving any disputes in the future. These agreements typically establish provisions for:
The expected contribution and ownership of each owner. This includes the day-to-day work and financial responsibilities of each owner, as well as the proportion of the business owned by each person.
Your mechanism for decision-making. Having an agreed-upon procedure in place for addressing any differences of opinion in business decisions will help prevent conflicts from flaring with your business partner(s).
Distribution and salaries. Clearly explains how and when you and your business partner(s) and investor(s) will be able to take money out of the business.
Death of an owner, business partner or other key principal. Ensures your company has an organizational plan in place in the event of a tragedy.
Withdrawal of an owner, business partner or other key principal. If a partner leaves a company, whether by choice or not, details a buyout plan or other succession mechanism that can protect your business.