If you were headed into the forest to walk a new trail – would you rather go alone or with an experienced guide?
Every day, business is a lot like a walk in the forest. Sometimes you can see clearly ahead and you know exactly where to go. Other times, the path gets blurred, or there are a few paths and you aren’t sure which one to take. Even still, sometimes the path disappears completely and you find yourself truly stuck in your tracks. You don’t know where to turn and you fear that walking even the shortest distance in the wrong direction could really get you into trouble.
An attorney is that experienced guide you need for your business, especially when it comes to buying, selling or expanding. I wanted to break each scenario down and discuss just a few of the times an attorney would add value to your decision making.
Buying/Selling
Dissolution. You want to buy out your partner or vice versa. (I will use “partnership” as a generic term but know that we’re including shareholders as well). In the best case scenario, you had an attorney draw up your documents when you first entered into your partnership. If you are reading this and you aren’t at the “buying out” phase yet, now is the time to call an attorney for a review of your current corporate documents, and to put your verbal agreements into writing If you are already past that, ask yourself:
- Sort of like a “prenup” in a marriage, did you create an agreement at the beginning of your partnership?
- What does that agreement specify about buyouts?
- Do you know all the state and local laws around dissolution?
- Are you bringing on new investors or shareholders? Have their rights and obligations been strictly spelled out in the shareholder’s agreement?
- Does your agreement provide information for if someone becomes disabled or passes away?
If any of those questions cause you to feel uneasy, call me to discuss.
Expanding
When it’s time to expand, it’s also time to take a step back and ensure your corporate documents and legal obligations are in order before adding another location, new employees, etc. Here are just a few examples:
- Are you buying a building? If so, will your company own the property, or perhaps a new company to act as a real estate holding company with a lease? Do you know what works best for you and why?
- Are you leasing a building or office? Have you reviewed and do you fully understand the corporate lease? Some things are negotiable and some are not. For example, a “good guy guarantee” clause is great to look for, because if the business fails or gets bought out and you are up to date with corporate obligations for rent and are not in default, this provision allows you to terminate the lease early.
- Will there be different partners connected to different locations or businesses? Have the correct documents been drafted and approved so all parties understand their role?
- Have the right protections for any potential liability been set up for each of your locations?
- Are you shuddering to think that you will need someone to look at all your new vendor agreements?
Again, if anything here makes you uncomfortable, call me. What you need all depends on your specific business plan and design.
It’s not just when you are buying, selling or expanding that an attorney can be your guide.
Sugarman Law P.C. can support you in getting all of your corporate documents in order (operating or shareholder agreements, meeting minutes, registrations, etc.) for times when you will need to show it, such as when you apply for a loan or when you decide to change your entity.
Sugarman Law P.C. can help you with all the filing and paperwork, so you can keep walking further into that forest and discover new business, new growth and new opportunity.
If you have any legal questions or want to retain counsel, please reach out directly to ssugarman@sugarmanlawpc.com.