“Owners of a new startup company … see the world through rose-colored glasses,” Goldberg Segalla’s special counsel Laura A. Colca writes in Buffalo Law Journal. Their focus is on a prosperous future — but they often aren’t looking far enough into that future. “While they may have made all the necessary filings and signed all the formation documents,” Laura explains, “one issue many owners of a new business fail to address is how the business will end.”
It won’t be something new business owners want to discuss, but “deciding how to handle dissolution is just as important as forming things correctly in the first place.” Partners might “reach an impasse on governance issues” — if so, is a forced buyout possible? One partner might die or become disabled — and in such a case, what happens to that party’s shares?
Laura goes on to explain “end of business” scenarios and what new business owners can do to address them at the start of their operations — including valuation methods, the role of third parties, and buyout plans.
“Addressing these awkward issues early on,” she advises, “will result in significantly less anguish should the partners ever have to part ways.
A seasoned transactional and corporate attorney with more than 20 years of experience, Laura has led multiple multimillion-dollar merger-and-acquisition transactions and directed high-exposure mediations, arbitrations, and settlement negotiations. She also regularly drafts complex contracts, handles purchase agreements, and resolves corporate finance concerns.