If your new business has multiple owners, it is important to have proper governance documents—like a partnership agreement, operating agreement, or shareholder agreement. Typically, these documents address topics like who can make day-to-day decisions on the company’s behalf, how ownership interests can be sold or transferred, and who decides what the company does with net profits. These documents can reduce the potential for costly disputes down the road and should be drafted around the owner’s specific needs and goals. Here are some topics that you’ll be discussing when you meet with your lawyer. We […]
What happens when a small business owner dies or gets divorced?
A client recently asked, what happens to small businesses upon the death or divorce of an owner? What documents should be in place prior to those events to smooth an ownership transition? These questions can have many different answers depending on the facts of a specific situation, but here’s a general overview of the process, consequences, and ways to control ownership of a business if a death or divorce occurs:
What happens to a small business if an owner dies?
The answer depends on the type of business. If the business is a sole proprietorship […]