When multiple people start a business together, it is important for them to develop and sign a partnership or shareholder agreement. The type of agreement the parties enter will depend on the nature of the business and the interests of the parties involved.
Do you need assistance crafting a partnership or shareholder agreement or are you engaged in a partnership or shareholder dispute in Southern California? You will want to contact Leiva Law Firm as soon as possible.
Our experienced business litigation attorneys represent clients all over the greater Los Angeles area. Call 818-703-1777 to schedule a free consultation.
What Should Be In Partnership Agreements
The term partnership can have multiple business meanings. For example, a general partnership is an agreement in which the partners share management and liabilities.
In a limited partnership, however, the limited partner (sometimes called the sleeping partner) has a share of ownership but generally takes no part in managing. A limited liability partnership (LLP) is almost similar to a limited liability company (LLC) but is different from a general partnership or a limited company in that all partners avoid liability issues for wrongful acts or negligence.
Partnership agreements should generally include the following information:
- Name of partnership
- Term of partnership
- Required contribution for new partners
- Future contributions
- Draws to partners
- Retention of profits
- Distribution of profits/allocation of losses
- Powers and duties of management
- Decision processes
- Financial matters
- Meeting plans
- Record maintenance
- Asset ownership
What Should Be In Shareholder Agreements
A shareholders agreement covers a business’ funding, structure, and management. The agreement should cover many of the issues that are expected to arise in the line of a business.
Shareholder agreements should generally include the following information:
- Executive structure
- Shareholder and director voting rights
- Voting rules
- Decisions requiring votes
- Auditing arrangements
- Dividend policies
- Capital contributions
- Salaries
Resolving Partnership and Shareholder Disputes
In the course of business, it is not uncommon for people who have a history of working closely together to suddenly arrive at a complete impasse regarding a certain business matter. In most cases, both parties want to avoid litigation but neither party wants to relent either.
Any party involved in a partnership or shareholder dispute should be certain to retain legal counsel as soon as possible. An experienced business litigation attorney will be able to negotiate an effective resolution.
In some cases, meditation can prove to be a desirable alternative to litigation. If forced into litigation, the Leiva Law Firm will work to help you accomplish the most desirable possible outcome for your case.
Find a Business Litigation Lawyer in California
If you think that you might be involved in a partnership or shareholder dispute in Southern California, it is in your best interest to quickly seek legal representation. The Leiva Law Firm helps clients in communities in and around Los Angeles.
Marlene Leiva has over a quarter-century of legal experience. She can provide a complete evaluation of your case when you call 818-519-4465 or contact us online to schedule a free consultation.
