In any business with multiple owners, there is a good chance that at some point, one or more of those owners may no longer be affiliated with the company, whether by choice, death, bankruptcy, or divorce. It’s important for business owners to plan for this in advance, so that when one of these situations occur, there is a preexisting agreement that sets out an orderly way to handle the situation. The best way to do this is with a buy-sell agreement. A buy-sell agreement is a contract between business owners that dictates who can buy a departing owner’s share of the business and establishes a fair price for the owner’s stake. The agreement may also provide procedures to resolve disagreements when a majority of the owners but not all of the owners decide to sell the business. Here are some reasons why you, as an entrepreneur, don’t want to be in business with other people (even family) without a buy-sell agreement in place: [Read more…]
Partnership Archives
7 Reasons to Use a C-Corp for Your New Business
One of the first decisions a small business owner faces is choosing the right form of entity for his or her company. The most popular form of business in recent years is the limited liability company (LLC), because it is simple to organize and manage and can be taxed as a partnership (i.e. without the “double taxation” associated with C-Corporations). However, there are many reasons why you should avoid structuring your new business as an LLC taxed as a partnership and instead use a C-Corp structure. [Read more…]