Prenuptials for Business Owners

WHEN THE BLUSH

IS OFF THE ROSE:

PRENUPTIALS FOR BUSINESS OWNERS

New business ventures are always exciting, yet sometimes in their haste to begin, important issues are sometimes frequently overlooked.

Every business venture presents its own unique challenges and issues. At times the challenges can be overwhelming. Once accomplished, entrepreneurs face the challenge of staying in business.

As attorneys, we have counselled many entrepreneurs on how to proceed with a new venture. We have encountered many issues and as experienced lawyers we can help minimize many of the problems that business owners will encounter in their business development.

Many events can change the course of a business such as:

Your partner decides to leave the business and insists you buyout his or her interest for an unreasonable amount of money in cash.

Your partner leaves the business, taking with him / her the client list and several of your best clients.

Your partner opens a competing business across the street from you.

Your partner accrues a huge amount of debt, without your knowledge, thereby placing the future of the business in jeopardy.

Your partner dies and your partner's family is now your partner.

A minority shareholder withdraws and files a lawsuit to enforce his/her rights and seek a buyout of his/her interests.

Any one of these events could trigger the end of your business venture. As attorneys, we know that there are preventative measures that can be taken to avoid, or at least minimize, the consequence of these events without ending the business.

To prevent a costly legal battle between partners over the value of your respective interest, we strongly urge business owners to execute a shareholder agreement (for a corporation), a partnership agreement (for a partnership), or a management agreement (for a Limited Liability Company ) which delineates the manner in which each partner can withdraw from the business, sell their interest to a third party, or sell their interest to the other partners all based on a predetermined valuation formula.

To prevent your partner from leaving the business with the client list or with clients, you could execute a "Non-Compete Agreement" which prevents partners or owners from competing with the other in a particular geographic area for a predetermined period of time.

Disputes between partners, shareholders or members of an LLC could be devastating and ruin a business. Planning ahead and executing an agreement between the partners could help avoid a disastrous lawsuit.

For more information, please contact:

George Bellas

Bellas & Wachowski

15 North Northwest Highway

Park Ridge, Illinois 60068

Phone: 847-823-9030 x219

Email: george@bellas-wachowski.com

Web: www.bellas-wachowski.com

LinkedIn:http://www.linkedin.com/in/georgebellas

Twitter: http://twitter.com/GeorgeBellas