Business Agreements Lawyer

It is impossible to overstate the importance of using written agreements to evidence all business and corporate relationships. The process of negotiating and documenting business terms significantly reduces the potential for costly litigation and helps ensure long term profitable business relationships.

Examples of some of the more common types of agreements during various stages of business existence are described below:

Pre-formation / Start-up Stage

• Operating Agreement (LLC) / Shareholders’ Agreement (Corp.)
  Documents the relationship between the owners of the company operating the business. Should address capital contribution obligations, service obligations, voting rights, distribution priorities and various buy / sell provisions.
• Employment Agreement
  Documents the relationship between the company and its employees. Should include employee duties and obligations, compensation and restrictive covenants (non-competition, non-solicitation, non-disparagement and confidentiality covenants).
• Space Lease
  Documents the relationship between the company and its landlord. Likely the first corporate obligation each owner will have to personally guarantee.
• Supplier / Vendor Agreement
  Documents the relationship between the company and third parties who provide the company with goods and/or services necessary for the company’s business. Should include specifics on services / products provided, payment terms and warranties.
• Agreement with Clients / Customers
  Documents the term on which the company will sell its products / services including payment terms, delivery time and warranties.

Operating / Growth Stage

• Financing Documents
  Include the terms on which the company will receive investment capital or loan proceeds to facilitate operations and growth. Capital raising transactions are governed by federal and state securities laws which in part dictate the information the company must disclose to a potential investor. Capital raising transactions are conducted through the use of private placement memoranda (PPMs) and subscription / purchase agreements.
• Acquisition Agreements
  Allow a company to grow by acquiring the equity or assets of another company. A portion of the purchase price is usually financed by the seller creating a need for promissory notes and security agreements in addition to the purchase agreement.

Retirement / Exit Stage

• Partner Buyouts
  Documents the terms by which one owner will sell his/her/its ownership back to the company or to another owner. Can be a separate agreement or the terms can be included in the Operating Agreement or Shareholders’ Agreement prepared during the Pre-formation / Start-up stage.
• Business Sales
  Similar to the Acquisition Agreements in the Operating / Growth Stage. As part of the sale process, the buyer will ask to see all documents and agreements of the selling company (due diligence). The buyer’s willingness to pay top dollar will be largely dependent on how well the seller has documented its business relationships.