Online incorporation is cheap and quick, which would appeal to many startup companies, but they soon discover that corporate governance isn’t something that should be bought off a late-night informercial where you can “set it and forget it.” Instead, administering a company takes time and resources, and failure to do so can subject a company to hefty fines and penalties, including the loss of the corporate veil that shields creditors and others from the owner’s personal assets.
The law recognizes corporations as a wholly separate person from its shareholders, as if the corporation itself was its own living being. In fact, one of the only things a corporation can’t do that you and I can is vote in an election: it can acquire, hold and convey property; it can sue and be sued; it has its own legal rights (some of which are constitutional rights) and it can be taxed according to its “personal” income. These basket of rights and responsibilities are what makes corporations a critical legal tactic for business growth, and in exchange companies have to keep up corporate formalities to keep going. Life Law Partners can assist with these formalities, including maintenance of the corporate record book and planning and running shareholder and board meetings.
Directors & Officers Liability Mitigation
Because a corporation is a separate legal person, it is subject to the direction of the actual individuals who manage it: its directors and officers. These individuals, in turn, owe the corporation the highest duty under the law: a fiduciary responsibility. In essence, the directors and officers owe the company a duty of care (to run the company with their best business judgment) and a duty of loyalty (to put the company’s interests above their own). Life Law Partners can assist in managing and mitigating these responsibilities, including through insurance programs and indemnification matters, as appropriate. And if the company is ever a victim to a breach in a fiduciary duty, we have experience in going after wrongdoers like these, even if the issue is purely internal.
Often internal controls deal with financial policies and procedures, but a well-run company has similar safeguards in place for corporate decision making, often blurring the lines with human resources and organizational control (although we don’t like picturing them, this is basically an org-chart). Life Law Partners can assist with putting these controls in place and concocting a system to make sure these controls stay strong and operative well into the future.
The bread and butter of any corporate practice is in the paperwork: the mountains of contracts that will eventually govern how your company interacts with its customers and its vendors, often with the pushing and pulling that comes from negotiating with the other side. We provide counsel on the plethora of contracts that businesses often interface with, including licensing agreements, purchasing agreements, standard terms and conditions and non-disclosure agreements. Yet, every contract is a snowflake as no two are exactly alike, and Life Law Partners can assist in making the boilerplate text work for you in contracts you can read and (gasp!) actually understand.
Although writing a contract takes skill and negotiations, the legal help you need doesn’t end once the parties have signed on the dotted line. Contracts come with promises, and these promises need to be fulfilled. Over time, the number of promises you make can pile up, leading you to forget you ever made them in the first place. Life Law Partners can assist with managing these promises, ensuring that you live up to your word and follow through as promised. We do this with contract databasing, tracking the ongoing covenants you make to others and ensuring their compliance with covenant monitoring.