A living Will for your business

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Just as with people, businesses need ‘living Wills’ too. A 'living Will' will govern how your business is run and what will happen to it after you’ve gone.

They’re vital to take the emotion and uncertainty out of difficult situations, for instance, when someone dies or if there is a dispute between the owners.

The key is to make sure you have the right arrangement in place for your business.

Shareholders' Agreements are private legally binding documents between the company and some or all of its shareholders and regulates how they interact with each other. The main issues addressed in even a simple shareholders’ agreement will be the composition and management of the board, decision making, dispute resolution, distribution of profits, restrictive covenants and the issue and share transfer provisions.

In partnerships there is no legal requirement for a written partnership agreement but it is certainly advisable. Why? Because without evidence to the contrary under the Partnership Act 1890 all partners would be entitled to receive an equal share of the profits as well as losses, and to receive interest payments on invested capital; they would all have to take part in the management of the partnership; decision-making would be by a simple majority of partners and there would be no power to expel a partner.

In LLPs, as in a partnership, there is no legal requirement for a written LLP agreement but again, it is strongly advised. Otherwise the rules that apply will rarely be adequate to run a modern business effectively. As with the partnership agreements, it is for the members to set out how they want to manage the business and regulate their relationship as co-business owners.

Family Charters are an altogether different kind of agreement as not all of the parties may be owners of the business, and non-family owners will be excluded from the Charter. These are more akin to a family 'mission statement' as regards the business as they are typically not legally binding. They can cover areas as varied as family goals, succession, resolution of family disputes, governance issues and share ownership to name a few.

Whatever your business, we can help you prepare the necessary framework to allow you to get on with running it. It’s the sort of document that you hope will never be needed, but can provide clarity and comfort in uncertain times.