Frequently Asked Questions: Business Law
Why is defining the relationship between owners important?
The simple answer is that defining the relationship between the owners at the outset gives everyone clear expectations and prevents much larger and more expensive problems from arising down the road. Some quick examples of issues to consider: Who owns what percentage of the business? Who is going to run the business? Can new owners join the business (if so, who decides, and what is the mechanism)? Can owners sell their portion of the business (if so, who decides, and what is the mechanism)? Can owners have other businesses? What happens if an owner divorces? What happens if an owner dies? As you can surely imagine, addressing and answering these questions at the outset are imperative.