I’ve had the pleasure of providing legal services to both large and small businesses for decades. Here I’ll explain some business documents that I believe are important for specific types of businesses.
Let’s Talk Trade Name – Statue says, and you may be surprised at this, that anyone operating a business in a name other than the true surname of the owner must file a verified statement in the county in which the business is to be conducted. Did you know? And if you don’t you could be charged with a simple misdemeanor. What is worse every day that goes by where you have not filed that statement is a separate and distinct offence. Ouch! This does not apply if your business is formed by a filing with the Secretary of State such as in a corporation, limited liability company, or a limited partnership.
That Buy/Sell Agreement – If your business is one that has multiple owners I suggest that you draft a simple agreement which says exactly what happens in the event of a owners death, termination of employment or (it happens) a business impasse. The Buy/Sell Agreement should also include what the price of the company might be. Pricing of a business for a Buy/Sell is more of an art than a science, but these agreements normally provide for an appraisal or the application of a formula to arrive at a price.
That Operating Agreement for an LLC – This could be titled “Who Does What” because without an operating agreement every member of a multiple owner LLC has an equal vote in the management of the company, each member has the right to enter into binding contracts and if/when it comes to the sale or merger of the company unanimous consent is necessary. Think about that for a moment. With an Operating Agreement management of the company has much more direction.
Got Minutes? – Minutes of what actions shareholders and directors of a multi-owner company take can be extremely important. Minutes of meetings memorialize the action of the company and provide authority for officers to act. There should be written minutes of the election of officers, authorization of action (particularly large purchases, borrowing money and entering into significant contracts), and sales or issuance of stock.
Thank you for reading and should you have any questions be sure to make contact with me.