Browsing All Posts filed under »Entrepreneurs«

Winding Up Investments Gone Bad From A Business Perspective

December 27, 2012


Sometimes, despite management’s best efforts to make the business succeed, the business fails. Sometimes, because of management’s insistence on personal gain, the business fails. Sometimes, the two are commingled. Regardless, the result is the same. The company does not perform up to par, and the expectations of return need to be adjusted downward or possibly […]

Board Liabilities

November 20, 2012


Throughout the dialogue about boards (whether they are at the beginning stage, public company, or advisory boards), the liability question has hung over the discussion like a gray cloud. These fiduciary duties loom as foreboding shadows against the backdrop of public companies where nasty words like “Sarbanes Oxley” strike fear in individuals. In order to […]

Using Advisory Boards in Small Business

November 13, 2012


In the last two articles, I referenced Advisory Boards and their usefulness in accomplishing goals for small business. Indeed, Advisory Boards are useful tools in small business. If you look at the role of the board as two fold – first, legal monitoring and second, setting the strategic direction – then bifurcating these roles can […]

The Board of Directors in the Early Stages

October 31, 2012


While operating and shareholder agreements play an important role in corporate governance, they are insufficient when it comes to corporate governance. Ensuring that best corporate practices are followed cannot be spelled out in a legal document. A group of individuals is usually necessary to provide oversight and direction and help set the strategic tone. Personally, […]

New Perspective on Corporate Documents

October 25, 2012


“We believe it’s absolutely essential for family members to develop the initial draft of a shareholder agreement, thoughtfully considering the questions set forth below. Attorneys may be very helpful in the process, but too often they have set ideas about what makes a good shareholder agreement. They approach the task of preparing one with a […]

Minority Rights: Tag Alongs, Drag Alongs, Preemptive Rights, and Other Minority Protection Provisions

October 18, 2012


As alluded to in last week’s article, controlling governance is a major purpose of shareholder agreements. Curtailing the powers of the majority is a driving force in several governance decisions. Beyond just the board power, other rights are often used. Personally, I believe every deal is unique. Consequently, assertions that anything is standard, market, or […]

The Purpose of Shareholder Agreement: Corporate Governance

October 11, 2012


Corporate governance,(1) at its most basic level, is how a corporation operates. Specifically, who makes what decisions, and usually more importantly, who controls who gets to make those decisions. Almost every corporation has their owners (shareholders, members, partners, etc.) elect a committee (board, management committee, executive committee, etc.), which in turn elects and manages the […]