Anticipating a Business Divorce? Steps to Prepare for its Success.
Unfortunately, you must prepare for the worst at the beginning of the initial realization and plan to see a business dream come true. The worst possible outcome could be the breakup and eventual ending of the partnership. To have a substantial base for the start of your business, you must have a steadfast set of operating agreements. These agreements are designed and drafted to direct the daily operation of the business, office and partner roles, the company’s assets, and the procedure for any departure’s from the company.
Why Your Operating Agreement Is Essential
Frequently, we are called upon in situations where the company itself drafts it’s own Operating Agreements and valuable contracts without the input or assistance of an attorney. The results can be disastrous. In the beginning, most partners and officers are excited about the prospects of a successful business venture. They don’t stop to consider what happens if the business is not so successful or that things can change over time and with the company’s growth.
Such as:
- Profits
- Number of Employees
- Partnerships Increase
- Responsibilities Shift
This creates cracks in the original agreements. In short, the original operating agreement does not meet the present business activities and needs for continued growth.
Business Ownership: Plan Ahead With Widerman Malek
It is critical for all new start-ups to use an attorney to position their business venture in a position of strength from the start. Secondly, have an attorney revisit those documents every three to five years to be revised so that they are consistent with the current needs of the company and the wants of the officers/partners. If a company is diligent in getting this done, and in the unfortunate event of business divorce, it is much easier to deal with under a currently revised operating agreement than to interpret and adapt an old and outdated operating agreement.
Don’t hesitate to contact Scott Widerman; he has experience with business litigation and negotiations and can provide insightful advice on your set of operating agreements and procedures.
