Corporate Governance Lawyers & Attorneys

Creating Governing Documents

If you are starting a business, an attorney can help you create and memorialize the rules and processes establishing how your company will be controlled and directed. This is broadly referred to as your company’s corporate governance. Your company’s corporate governance will be set out in a collection of governance documents that come in different forms for different types of entities. These documents each perform different functions, but the overall goal of clearly delineating the operating rules of the entity is the same.

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Organizing Documents and Agreements

Corporate governance is critical to the smooth functioning of any business. Working with an attorney to create an agreement among owners specific to your entity’s form can provide a clear basis for operating the business and resolving any disputes in the future. These agreements typically establish provisions for:

The expected contribution and ownership of each owner. This includes the day-to-day work and financial responsibilities of each owner, as well as the proportion of the business owned by each person.
Your mechanism for decision-making. Having an agreed-upon procedure in place for addressing any differences of opinion in business decisions will help prevent conflicts from flaring with your business partner(s).
Distribution and salaries. Clearly explains how and when you and your business partner(s) and investor(s) will be able to take money out of the business.
Death of an owner, business partner or other key principal. Ensures your company has an organizational plan in place in the event of a tragedy.
Withdrawal of an owner, business partner or other key principal. If a partner leaves a company, whether by choice or not, details a buyout plan or other succession mechanism that can protect your business.

An Operating Agreement governs the financial and managerial rights and duties of LLC members. While most states don’t require an Operating Agreement to register an LLC, these agreements set out important rules and expectations that help an LLC run smoothly and can ultimately protect the LLC from financial and management disputes. A business attorney can help you create an Operating Agreement that suits the specific needs of you and your partners and clearly lays out your rights and responsibilities.

Corporate bylaws, required in most states, outline the purpose of a corporation, the number and type of shares and stock classes, as well as details regarding the board of directors and corporate officers, among other things.

A shareholder agreement supplements bylaws and establishes the rights and responsibilities of all shareholders, who own a share of stock in a public or private corporation, and describes how the company should be operated. Bylaws outline the rights and responsibilities of owners of a corporation. Unlike bylaws, these agreements are not required but considered prudent if you have multiple shareholders.

If you are operating your business as a partnership, you may want a lawyer to draft a partnership agreement outlining governance of your company. These may contain very similar provisions to an LLC Operating Agreement.

These agreements describe the work to be performed by advisors for a company, their compensation (if any), as well as any requirements for confidentiality (e.g., a non-disclosure agreement) or non-competition.

Buy-Sell agreements outline procedures in the event of the death, disability or bankruptcy of an owner.

Investment and equity plans define financial rights and obligations among owners, employees, investors and shareholders. From early-stage fundraising rounds to more complex financings and offerings, your business will likely require different types of agreements as your business grows and your financial needs change. A business attorney can help you determine what types of agreements are appropriate for each stage in your company’s development.

Equity Plans

Your company’s equity plan establishes how equity will be shared among owners, employees, investors, and shareholders. A clear equity plan is necessary if you are planning to give options (usually through a stock option grant) or other equity-based incentives (such as a profit unit) to your employees.

Investment Agreements

An attorney can assist you in creating an agreement between your company and individual investors by laying out the terms of the transaction at the time of a sale of stock or securities. You should create a written contract for every investment, regardless of what type your company is offering. A strong investment agreement can protect you from litigation or any future disagreements about ownership interest in your company.

A great lawyer can help you set a solid foundation for your company with strong corporate governance -- both organizing documents and financial agreements. A Priori lawyer will get your company off to a solid start and protect you down the line from any disputes with your partners or investors.

Priori Legal has compiled key questions your lawyer will need to ask during your first consultation on a variety of different topics, including owners joining and leaving, estate planning and buy-sell agreements and corporate governance. By completing one of these prior to your meeting, you can make your time more efficient and productive.

Corporate Governance Lawyers & Attorneys

Creating Governing Documents

Organizing Documents and Agreements

Equity Plans

Investment Agreements

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