Business Owner Rights
Shotgun Buy/Sell Option Agreements
Published Date: December 18, 2023
When I served in the armed forces, a shotgun was not exactly “standard issue”. It is far too much of a blunt instrument. The same might be true when dealing with a “shotgun buy/sell” provision in your shareholder, partnership or LLC operating agreement. A shotgun buy/sell option agreement is a common contractual provision in a partnership, shareholder or LLC agreement. [...] Read More
Ignore the Buyout Mechanisms in Your Shareholder Agreement at Your Own Peril
Published Date: December 14, 2023
The end of the year is upon us, and many shareholder or limited liability company agreements have built-in mechanisms for the forced buyout of a deceased shareholder’s interest. The “Certificate of Agreed Value” is often used in such agreements to establish a mechanism for shareholders or members to establish an agreed-upon value for the company’s shares, to be executed in [...] Read More
The Role of “Phantom Income” in Generating Claims of Shareholder or LLC Member Oppression
Published Date: December 5, 2023
With the end of the taxable year upon us, many shareholders or members of closely-held corporations or limited liability companies are anticipating the receipt of their K-1s for 2023. Today we wanted to take a moment to talk about a recurring theme we see in disputes between partners and shareholders: “phantom income.” For this article we called upon Mark Corrado, [...] Read More
“Notice and Cure”: Two Critical Words in Partnership and LLC Disputes
Published Date: December 4, 2023
It is often the case that shareholder agreements, partnership agreements, or limited liability company operating agreements contain express provisions which require an aggrieved party to give the other side written notice of disputes and an opportunity for the other side to fix the problems before resorting to a claim. "Notice and Cure" is the name of these provisions. I've seen [...] Read More
Non-Solicitation & Non-Compete Agreements in Shareholder Disputes
Published Date: November 20, 2023
It is common to include non-compete and non-solicitation provisions in operating, shareholder or partnership agreements. When there is a dispute, these provisions contain limitations on the parties to the relationship in terms of what can and cannot be done in the way of competition if a member or shareholder departs the business. This prevalence is consistent with a recent study [...] Read More
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