1.operating clause that allows the incorporation
of oral agreements and implied agreements;
1.limit equity’s role in a family-business; and
1.waiver of default rules must be clearly
a business entity, no matter how large or small,
which effective control of the business rest in the families’ hands.
Effective control by the family is evident by
at least two family members being involved as
owners or managers.
operating clause that allows the
oral agreements and implied
1st Default Rule...
Operating agreement” means..
the agreement, whether or not referred to as an
operating agreement and whether oral, in a
record, implied, or in any combination thereof,
of all members of [name of business] company,
concerning matters of the business.
Default Buy and Sell Agreement:
Majority investors will enter into a buy and sell agreement whereby in the event
any of the minority investors desires to terminate [his/her] activity with the
businesses named here that the corporate stock held by the terminating investor
will be first offered to the remaining investors or the
corporation. The bylaws will further provide that in the event none of the
investors desire to purchase the stock that then and in that event, the corporation
may purchase the minority investor’s shares. The agreement must be documented
in writing. If neither the shareholders nor the corporation want to purchase
the stock or are unable to purchase minority investor’s share, a willing
buyer in the open market may then purchase the
3rd Default Rule...
Limit equity’s role in a family-business
Waiver of default rules must be clearly negotiated
4th Default Rule...