The start of a New Year means the annual ritual of making New Year’s resolutions. Aside from personal resolutions, have you considered any resolutions for your business? If not, here are three that you should consider:
- Have Your Corporate Documents Reviewed and Updated as Needed: Your corporate documents are not meant to be signed up and left in a drawer for eternity. Laws change, as does your business, and you need to keep your corporate documents – the legal lifeblood of your business – aligned with such changes. For example, if you operate as a Minnesota limited liability company, Minnesota’s Revised Limited Liability Company Act went into effect as of August 1, 2015 . The Revised Act significantly revises Minnesota LLC law, and all LLCs will be governed by the new law effective as of January 1, 2018. Rather than wait until the last minute, now would be a good time to have your attorney review your existing LLC documents and advise as to whether an early opt-in would be beneficial.
- Review Your Standard Contracts: Every business utilizes some sort of written contract – be it a purchase order or something more comprehensive – and the language in that contract has a significant impact on your business, particularly if a customer/client does not pay you. Does your contract contain an attorney fees clause? How about alternative dispute resolution provisions (such as mediation or arbitration)? If you’re a contractor or subcontractor entitled to mechanics lien rights, does the lien notice language in your contract comply with the current statutory form? Asking your attorney to review and update your contract(s) can avoid costly and time consuming disputes in the future.
- Establish a Succession Plan: Regardless of your age, and regardless of the age of your business, there is no time like the present to create and implement a succession plan for your business. Your business succession plan could be as simple as providing in your estate plan for the ownership interest in your business entity to pass to your spouse or one or more of your children. It could also be more complex, such as an employee stock ownership plan (ESOP) or identifying a third party who may be interested in acquiring your business. Whatever the path it is that you choose, an effective succession plan is created years in advance of its actual implementation, and your attorney can bring his/her experience to bear in assisting you with such a plan.
Sometimes it is impossible to avoid disputes regarding your business, but by following these three simple steps, a business owner can at least minimize the chances of a dispute that could impair his/her business.
Jeffrey C. O’Brien is an attorney with the Minneapolis-based law firm of Lommen Abdo, P.A. He can be reached at (612) 336-9317 or via email at firstname.lastname@example.org.
NOTE: the information contained herein is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. Contacting the proprietor of this site does not create an attorney-client relationship. Please do not send any confidential information until such time as an attorney-client relationship has been established.