Partnership & Buy-Sell Agreements.

Partnership & Buy-Sell AgreementsYou've found the right business partner, and you're up and running.  But what happens when you and your partner don't agree?  No matter if it is a Partnership Agreement, a Corporate Shareholder's Agreement, or an LLC Operating Agreement, Neal can draft language that meets the needs of you and your business and answers important questions like:

                     If we disagree, who makes the final decision?  Businesses must be steady and reliable to meet customer's needs.  When business partners  disagree, deadlock and indecision can create a major problem for the business.  Business partners should have a plan in place that allows the business to continue functioning and serving customers, even if the partners disagree on a business decision.  Neal will draft an agreement for you that helps prevent indecision and inaction based on disagreements, and instead provides a clear path forward in case of a disagreement between partners.

                    What if one of us wants out?  Each business partner has taken on risks and responsibilities to make your business a success.  But sometimes one partner is ready to move on, while the other wants to continue owning and operating the business.  It is essential that business partners address this situation up front, in a written agreement.  When two partners decide to start a business, for the most part they are starting on even ground.  Neither partner knows who might decide to leave the business first.  This is the time to make decisions on issues like: 1) Who can buy in to the company, 2) Will the remaining partner have the first right to purchase the departing partner's interest, 3) How will that business interest be valued, and 4) What kind of payment terms will be available to the remaining partner.  It's usually a bad idea to try to address these questions at a later time.  This is because when one partner is selling his interest, and the other partner is buying, the two partners have very different motivations.  A better approach is to address these issues up front, so that when the time comes for a partner to leave, everyone has the same expectations, the partners are compensated fairly, and the business continues to run smoothly.

                    What happens on the death or disability of a partner?  Business partners rely on each other.  Each has his or her responsibilities and roles within the business that help make it a success.  If one partner can no longer fill those roles because of death or disability, then the remaining partner is stuck owning half of the company, but owning all of the responsibility.  Neal can help you draft an agreement that address death or disability of a partner by compensating the departing partner fairly, and providing the remaining partner with the opportunity to keep operating the business and be compensated for the additional responsibility.

                     How do we value our business?  If one partner wants or needs to get out of the business, how do business partners fairly value the interest to be transferred?  Neal will help you determine the proper way to approach valuation of your business interest, and will draft an agreement that clearly establishes fair expectations for the value of the business interest being transferred.  This can go a long way to plan for a smooth and amicable separation between business partners when that time comes.