Business

Can a director or CEO of a Delaware corporation do business with the corporation? Can the director lend money to the company, provide paid services, or recommend a relative as an independent contractor? The short answer is “yes”, but the transaction should be handled as an interested transaction and approved or reviewed under Delaware’s conflict-of-interest […]

One Owner or Many Partners: Why Every LLC Needs an Operating Agreement If you form a limited liability company (LLC), an operating agreement is not just a “nice to have” document. It is an irreplaceable ownership and governance record that provides internal guidance and explains who owns the company, who has authority to manage it, […]

In New York, courts strictly construe indemnification clauses. This means that: Under New York Limited Liability Company Law § 420, LLCs are permitted to indemnify, hold harmless, and advance expenses (including legal fees incurred in litigation) to members, managers, or other persons in connection with legal claims, except where such person acted in bad faith, […]

What Indemnification Means Every business needs protection that allows its leaders to act with audacity rather than fear. That shield can be the indemnification provision in a partnership agreement. An indemnification is a legal obligation a company undertakes to cover its managers, members, officers, and possibly other people (collectively named “agents”). These individuals act on […]

Definition For many entrepreneurs, the term “business divorce” is the most frightening prospect. The term refers to the legal separation of business partners who cannot continue operating the company together. Unlike family divorce, “business divorce” is primarily focused on the division of assets and liabilities. Depending on the applicable law, governing documents, and the partners’ […]

Before starting a partnership, every founder needs to face the uncomfortable question: What happens to the company when a partner leaves? A clear “buy-out” provision in the partnership agreement, designed to preemptively structure a partner’s exit, secures the company’s financial future and stability. This proactive step ensures that, regardless of the reason — a voluntary […]

When two equal partners pool their resources to run an enterprise together, they rarely anticipate any unsolvable disagreements between them. An intractable disagreement over a business issue is usually referred to as a “deadlock.” The topic of deadlock resolution is often underestimated and overlooked by business owners until they encounter it during their business operations. […]