Pre Nup Business Start-Up / Formation Sacramento
Sign a Pre-Nup When Considering That Business Start-Up / Formation
A pre-nuptial agreement is not just the newlyweds anymore it is equally important when Business Start-Up / Formation comes into play. There have been more startups flop because both sides are not on the same page as far as ‘the deal’ is concerned. This is where a business pre-nuptial comes in very handy. There is a very popular social media entrepreneur that comes immediately to mind when I think of this. You may want to investigate the ‘Zuckerberg Facebook Litigation’ to see what the repercussions of not doing it properly could very well be.
When building a business pre-nup consider these points.
- What is your combined goal of the company
- If one is not living up to their end of the agreement how is it resolved and by whom
- If you are approached to sell your combined business then how is that resolved
- Have the initial investment amounts whether cash or assets listed for both parties
- Is there going to be a board in place to determine what circumstances a party can be removed from the business
- Decisions; whether they are day to day or major key decisions; how are they to be made
- Salaries for both sides; if they are entitled to any; who decides that and at what rate are they changed
- What is the time commitment expected from both sides
- Is one party able to buy the other party out of the business and if so at what amount
- Have the roles and responsibilities clearly marked for both sides
- How is the percentage of the business divided amongst parties and who decide that
These points should not be considered suggestions; they should be considered mandatory steps in a a Business Start-Up / Formation plan between more than one party. If you need assistance compiling your own pre nup feel free to contact Abrate & Olsen.