When a business partnership is formed, the last thing on partners' minds is the possibility that one day that partnership will end. But life happens, plans changes, and not all partnerships survive the test of time.
Within a limited liability company, it is not uncommon for disputes to arise among LLC members. Many of these disputes are the result of an LLC member breaching his or her fiduciary duty. When a member does not act in the best interests of the LLC, the effects can be damaging to the company.
A breach of fiduciary duty by a shareholder in a closely-held corporation can have significant repercussions - financial, business-related, and otherwise. Often times these shareholders are also officers or directors, so their breach can have significant impact on the company. In some cases, another shareholder or even the company can seek to remove that shareholder from the company.
Disputes among shareholders in a corporation can be very problematic, costing a lot of money and disrupting operations. When shareholder disputes are among majority and minority shareholders, they can be especially difficult, due to an imbalance of power and decision making capabilities.
Non-disclosure agreements (NDAs) can play a critical role in the operations of virtually any business, particularly when it cooperates with another business or professional.
One of the greatest risks to a company is the possibility that its employees could leak sensitive information or later compete against it.
A company's greatest asset is its trade secrets and intellectual property. This includes all processes and procedures used during its operations, as well as any ideas, technology or concepts that it extracts value from.
From the moment a business owner sets up an LLC or other legal entity to structure the company, he or she is acutely aware of the potential for lawsuits. Whether or not the risk for legal troubles is high, the possibility is in the back of most business owners' minds.
In the formation and launching days of a business, owners spend a significant amount of time and thought strategically selecting business partners who will contribute to the growth of the business. If, as time progresses, that partner ends up doing more harm than good and is no longer acting in the best interests of the business, you may become interested in removing that individual from the partnership.
One of the most critical - and often overlooked - steps in starting a company is asking the right questions while selecting an appropriate business formation or entity structure that will keep the venture secure and allow for scalability through the future.