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Definitions in Shareholder Agreements Matter When Transferring Family-Owned Business Stock

Owners of family-owned corporations often enter into shareholder agreements that spell out whether and to whom corporate shares can be transferred. Frequently, these agreements provide for rights of first refusal by the other...more

Do You Have a Reasonable Expectation of Receiving Dividends if You Acquired Your Shares in a Family-Owned Corporation Through Gift...

Corporate shareholders often expect to receive dividends in connection with their ownership of corporate shares. This is particularly true when owners invest capital in or provide other services to the company in exchange for...more

Will Your Family-Owned LLC Be Required to Pay the Fair Value of a Withdrawing Member’s Interest?

Family-owned businesses that are organized as limited liability companies typically reflect the terms of the company’s governance, along with the members’ financial rights and obligations, in a written operating agreement....more

Do You Have an Enforceable Contract for the Sale of Family-Owned Business Interests or Just an Agreement to Agree?

Family members often transfer family-business ownership interests or other assets between each other. Their discussions sometimes progress from informal negotiations to a written term sheet to a final written agreement....more

If You Expect to Work in the Family-Owned Business for Life, Be Sure to Get It in Writing

Family-owned businesses often employ multiple family members. Even if there is an expectation that employment will continue indefinitely, the company and the family member employees both usually reserve the right, explicitly...more

Corporate Formalities Matter in the Transfer of Shares of Family-Owned Businesses

Shares in family-owned businesses are often transferred between family members, whether through a sale or gift during a shareholder’s lifetime or through inheritance after an owner’s death. The parties to such a transfer...more

Are you paying your children too much to work in the family business? The IRS might think so.

A United States Tax Court recently issued a decision after trial that should serve as a reminder to management and controlling shareholders of family-owned businesses that salaries or other compensation paid to family-member...more

Carefully Consider the Scope of Releases When Settling Claims between Family-Business Owners

Litigation among family-business owners often ends with a negotiated settlement agreement instead of a trial and entry of judgment on the parties’ claims.  Through a settlement, the parties have the flexibility to agree upon...more

Do You Need to Do Business with Your Co-Owner’s Children? It Depends on the Language of Your Agreements.

Owners of closely-held businesses, including family-owned companies, often agree to restrict the owners’ ability to later transfer their ownership interests to third parties. Such restrictions prevent one owner from selling...more

Watch out for Fraud in Family-Business Purchase Agreements

In business purchase agreements, including agreements between family members, the seller often retains pre-sale liabilities, such as tax liabilities, while the buyer assumes post-closing liabilities related to the business’...more

Who is authorized to bind your family business to contracts?

A family business’ significant commercial relationships are usually reflected in written agreements. But who is authorized to sign those agreements and to bind the company to the terms? Typically, a company’s management will...more

What corporate records do family businesses need to provide to their shareholders?

In family businesses, disputes may arise concerning access to company information. Owners who work day-to-day in the business typically have unfettered access to this information, while passive shareholders may feel they are...more

Should You Arbitrate Your Family Business Disputes?

When family business disputes erupt, the parties often end up in court, where a judge or a jury will decide their fates. Litigation of these cases often takes years. In Massachusetts Superior Court, for example, the rules...more

Beware of Conflicting Interest Transactions in Family Business Management

Directors of all corporations – including family owned businesses – owe a fiduciary duty of loyalty to the company. This duty requires a director to put the interests of the company ahead of his or her personal interest and...more

Do “Corporate Formalities” Matter in Family Businesses?

Family owned corporations are subject to the same statutory requirements regarding entity governance as non-family owned businesses. Thus, in order to fully comply with the applicable statute for the state where the business...more

Information Security and Privacy News: Critical Cybersecurity Policies and Practices After the Settlement Order in FTC v. Wyndham...

Companies are threatened daily by attacks that expose customer credit card and other information stored on company servers, personal computers and other devices. It is, therefore, critical that companies do these three...more

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