Parents frequently transfer their ownership interests in a family-owned business to their children. This is usually done in connection with an owner’s estate planning or as part of an orderly succession of the business’ management. But what happens if an
Family Business Perspectives
A Legal Resource for Family Owned Businesses
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Watch Out For Claims Of Economic Duress After Purchasing Shares In A Family-Owned Business
Owners of family-owned businesses sometimes enter into agreements between each other for the purchase and sale of shares in the business. Ideally, these agreements are negotiated, documented and implemented in a way that each party is satisfied with the result…
Court Orders Family-Owned Business to Hold Annual Shareholder Meeting
Corporate shareholders with voting shares have the right to elect a corporation’s directors. Elections typically occur at an annual shareholder meeting. If the company does not schedule an annual meeting, a shareholder may have the right under the applicable state…
Son’s Lawsuit to Dissolve Family Business Based Upon Relatives’ “Vendetta” Against Him Allowed To Proceed
A judge in the Supreme Court for the State of New York recently allowed a petition for “common law dissolution” of a family-owned business filed by one shareholder to proceed despite the arguments of the other shareholders that the…
What Business Owners Should Know About Massachusetts’ New Non-Compete Law
On August 10, 2018, Massachusetts Governor Charlie Baker signed into law a piece of legislation entitled “An Act Relative to Economic Development in the Commonwealth.” This new legislation brings long-awaited non-compete reform to Massachusetts, and lays out some new guidelines…
Thinking of Selling Your Family Business? Some Preliminary Steps.
As the M&A market stays active, more and more family-owned businesses are selling to third parties. Many of these transactions involve sophisticated buyers, who spend a lot of time, money and effort on due diligence of a seller. While there are…
MA SJC Rules on Merger-Related Fiduciary Duties
Many operating businesses in Massachusetts are set up as limited liability companies rather than corporations. Limited liability companies can engage in many of the same activities as corporations, including participating in M&A transactions as both buyers and sellers. The rights…
MA SJC Rules on “Termination for Convenience” Provisions
In a recent decision, the Massachusetts Supreme Judicial Court ruled that governmental entities have great flexibility to terminate agreements with contractors where the agreement includes a “termination for convenience” provision. Many family-owned enterprises do business with the Commonwealth of Massachusetts…
Do Shareholders Need to Make a Demand Upon the Board of Directors Before Filing Suit on a Family-Owned Corporation’s Behalf?
When a shareholder claims that a director or officer has harmed a corporation through his or her improper conduct, these claims typically must be brought through a derivative action, in which the shareholder sues on behalf of the corporation. Ordinarily,…
Family Business Owners Should Be Aware Of Statutory “Deadlock” Provisions
Many family businesses run smoothly for years, until the business is sold or passed on to the next generation(s). There are, however, those circumstances where the family or closely-held business runs into a deadlock among management where the parties are…