Owners of closely-held businesses, including family-owned companies, often agree to restrict the owners’ ability to later transfer their ownership interests to third parties. Such restrictions prevent one owner from selling his or her interest to a “stranger” with whom the
Family Business Perspectives
A Legal Resource for Family Owned Businesses
Family Business Perspectives, published by Murtha Cullina LLP, focuses on legal issues affecting family-owned businesses. The blog covers topics such as buy-sell agreements, shareholder rights, intra-family business disputes, lease arrangements between related entities, fiduciary duties of family members, and strategies for smooth mergers and acquisitions. It also addresses practical concerns like valuation disputes, insurance considerations during transactions, and compliance with regulatory requirements. The content is aimed at helping family business owners and their advisors navigate complex legal and financial challenges unique to family enterprises.
Latest from Family Business Perspectives - Page 5
Watch out for Fraud in Family-Business Purchase Agreements
In business purchase agreements, including agreements between family members, the seller often retains pre-sale liabilities, such as tax liabilities, while the buyer assumes post-closing liabilities related to the business’ ongoing operations. But what happens when the buyer induces the seller…
Who is Authorized to Bind Your Family Business to Contracts?
A family business’ significant commercial relationships are usually reflected in written agreements. But who is authorized to sign those agreements and to bind the company to the terms? Typically, a company’s management will have actual authority to sign agreements. However,…
Bankruptcy Court Sends Not-So-Gentle Reminder About Observing Corporate Formalities
In a recent decision, the United States Bankruptcy Court for the Eastern District of Massachusetts sent a reminder to practitioners and family business owners that it is critical to maintain corporate formalities in order to avoid unintended liabilities. In the…
What Corporate Records do Family Businesses Need to Provide to Their Shareholders?
In family businesses, disputes may arise concerning access to company information. Owners who work day-to-day in the business typically have unfettered access to this information, while passive shareholders may feel they are “in the dark” as to the company’s decision-making…
Should You Arbitrate Your Family Business Disputes?
When family business disputes erupt, the parties often end up in court, where a judge or a jury will decide their fates. Litigation of these cases often takes years. In Massachusetts Superior Court, for example, the rules provide for a…
Family Businesses Should Carefully Consider Indemnification and Advancement Obligations Included In Limited Liability Company Operating Agreements
When a family business operated as a limited liability company brings on professional management, the parties typically focus on items in the operating agreement such as capital contributions, allocations and distributions, and governance. However, a recent Delaware Chancery Court case…
Beware of Conflicting Interest Transactions in Family Business Management
Directors of all corporations – including family owned businesses – owe a fiduciary duty of loyalty to the company. This duty requires a director to put the interests of the company ahead of his or her personal interest and not…
Do “Corporate Formalities” Matter in Family Businesses?
Family owned corporations are subject to the same statutory requirements regarding entity governance as non-family owned businesses. Thus, in order to fully comply with the applicable statute for the state where the business is incorporated, a family business should pay…
Welcome to Murtha Cullina’s Family Business Perspectives Blog.
Welcome to Murtha Cullina’s Family Business Perspectives Blog. This Blog is designed to identify and comment on common legal issues and current cases and developments that affect family-owned and controlled businesses.
Why focus on family-owned businesses?
Approximately 90% of businesses…