Business structuring deals with the mechanical aspect of how your business operates. The structure of your business has a direct impact upon items such as business taxation, control of business ownership, gift and estate tax on business transfers, and shareholder access to cash flow. As a business owner, it is critical that you or an experienced advisor understands the details relating to corporate structures and agreements between directors, owners, and key managers as they have a significant influence upon your business’ success and longevity.
Appropriately designed, communicated, and coordinated stockholder, operating, and partnership agreements provide confidence in anticipated business value and ownership rights. The primary purpose of these agreements is to preclude future disagreements that may handicap the attitudes and enthusiasm of shareholders. Well thought out and documented business agreements provide greater certainty that your expectations as a business owner will be fulfilled.
Another benefit to using effective business structuring techniques is their ability to help motivate and retain key managers. Employment and golden handcuff agreements can provide you confidence that key managers fully understand their responsibilities and incentive compensation that is intended to promote career commitment. These agreements can also provide documentation referred to as “non competition covenants” that give you greater peace of mind that a terminated or retired Key Manager will not become a competitive liability in your immediate market.
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