THE IMPORTANCE OF UPDATING SHAREHOLDER AGREEMENTS

Many closely held corporations and other entities utilize shareholder or membership agreements to govern the relationship among its shareholders and to address contingencies that might arise in the future. Once a shareholder agreement is drafted and executed, however, it is unwise to simply put it on a shelf and think that it is forever sufficient. Just with other aspects of the business, Global Business Lawyers recommends that shareholders' agreements be reviewed annually to ensure that the contingencies that are real possibilities in the future of the business are adequately addressed and continue to be as the business evolves. For example, there are a number of business valuation methods that could be employed to value the shares of a departing or retiring shareholder. Just because the shareholders agreed on a particular valuation method when the agreement was initially drafted doesn't mean that they must stick with that method forever. If a different valuation method better fits the evolving needs of the business and individual shareholders, a revision to the shareholders' agreement is probably in order. The investment of time and fees into a visit with your business lawyer to periodically review and maintain your shareholders' agreement and other business agreements helps to prevent significantly greater expenditures and potential damage to your business if litigating over an outdated and somewhat inapplicable shareholders' agreement in the future.


Disclaimer: This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. If you have questions or need specific advice relating to the matters contained herein, please contact Lovaas & Lehtinen, P.C.

A GREAT TIME FOR A BUSINESS CHECK-UP

Early in the year is a great time for a visit with your business lawyer and a business check-up. We frequently encounter business owners who have overlooked the payment of their annual filing fees to the Nevada Secretary of State, resulting in their corporation or LLC falling into a “default” status. The primary reason for forming a corporation, LLC or other like entity is to limit, to the greatest extent possible, the personal liability of the business’ principals for the errors or omissions of the entity. Failure to maintain the entity’s good standing with the Secretary of State is a common mistake that jeopardizes the protection of the individual business owners that entity formation is designed to provide. Likewise, many business owners overlook routine record keeping in the nature of corporate minutes and resolutions, or keeping stock registers and other records of ownership up to date. While the record keeping can be brought current annually, or periodically throughout the year, a consistent failure to maintain and update such records can also endanger the protections afforded by forming the entity in the first place. Your business lawyer is the appropriate person to review the status of your corporate filings and record keeping to ensure that your business is positioned to take advantage of the protections that Nevada law allows.

This time of year is also a great time to examine whether your business has evolved to the point where a different business form may be more advantageous or whether it is time to retain your business lawyer as your company's resident agent (which we always recommend) rather than a commercial resident agent service.
There are many "to-do's" this time of year. Adding a business check-up to the list is likely to save time and expense for your business as the year wears on.


Disclaimer: This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. If you have questions or need specific advice relating to the matters contained herein, please contact Lovaas & Lehtinen, P.C.

MANDATORY ARBITRATION IN NEVADA

In the Nevada court system, cases involving amounts in controversy of less than $50,000.00 (subject to certain exemptions) are assigned to the court annexed mandatory arbitration program. The goal of this program is to resolve lesser value cases on an expedited basis, with limited discovery, thereby freeing up valuable court resources for application to higher value cases. The case is assigned to a third party arbitrator, who is charged under the Nevada Arbitration Rules, with rendering a decision on the merits of the case within six months (up to twelve in extraordinary circumstances).
Partner Aaron Lovaas serves as an Arbitrator within Nevada's Court Annexed Arbitration Program and Global Business Lawyers has represented scores of clients within arbitration proceedings in Nevada.


Disclaimer: This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. If you have questions or need specific advice relating to the matters contained herein, please contact Lovaas & Lehtinen, P.C.