Governing Documents and Corporate Governance
Any New Business Should Have Governing Documents
Business and partnership arrangements can be tricky, even (and especially) among friends. A new venture can also be easily disrupted by unplanned events.
If your business has more than one shareholder, partner, or member running (or investing in) the company, or if you plan to seek outside investors, your business needs a governing document. The governing documents dictate the rights and responsibilities of each business owner and document your agreement in a written contract.
The governing document functions as a “pre-nuptial” agreement among the founders and interested parties in the company. It is critical to have a signed agreement prior to any fallout or split of the company in the case of, for example, the business failing, or if partners, members, or shareholders quit, die, become disabled, retire, become personally bankrupt, commit a serious crime under the company umbrella, launch a competing business, or any of countless other possibilities. The governing document will state how the company will deal with any of these events, and eliminates some of the uncertainty between the parties.
The appropriate type of corporate governance agreement depends upon the business structure.
For a Corporation (C-Corp or S-Corp) the governing document is called a Shareholder Agreement;
For LLCs it is an Operating Agreement; and
For a Partnership it is a Partnership Agreement.
We also consult clients on additional formation stage corporate issues such as; drafting corporate by-laws, conflicts of interest policies, corporate resolutions, independent contractor and employment contracts, and other essential company documents.
Contact Huang Noce PLLP
Our small business attorneys can draft your corporate governance documents to state the owners’ rights and responsibilities, authority and control, profit share and distribution, and other business matters. Contact us and schedule a consultation with one of our New York business attorneys at (646) 768-4190, or email us at firstname.lastname@example.org.