Protect Corporation and employee using documentation/ agreements/ legally binding articles

Asked over 1 year ago - Philadelphia, PA

I am 49% owner and I am going to appoint a Board of Directors (3-4 of them) who will share the ownership of fifty one percent when put together.

I like how folks are cooperating and choosing to work with me and build this meticulous effort. But at the same time, I am insecure and I am nervous that they might pool together and sell the company at some point for cheap/ fire the employee/ borrow large amount and abscond. Trust is a very fragile thing... and am having to trust someone...

I need help writing a set of articles, law documents or agreements or something to prevent anything bad happening to the Firm and its employee. What can be done...?

Attorney answers (3)

  1. Nellie T. Schulz

    Contributor Level 13

    1

    Lawyer agrees

    Answered . I do not know how far along you are in putting together this corporation or issuing shares, but the best way to control the corporation is by owning 51% of the issued and outstanding stock, if this is possible. I mention this because it appears that you have some kind of control over the corporation, if you have the power to name all the members of the Board. Other than that, I would suggest your engaging a corporate attorney to write the documents you need to protect your interests. What help an attorney can give you at this time depends on what documents have already been filed or agreed to - and such documents should be reviewed by the corporate attorney you engage.

  2. Owen Morrow Hathaway

    Contributor Level 4

    2

    Lawyers agree

    Answered . It sounds like there are some things going on among you and the people you intend to appoint as directors. Any time more than one person gets together to start a business (or even one person, for that matter), it's wise to consult an attorney for advice on the particulars of the situation. There are so many things that can come up, you really should use an expert to help guide you. A search on Avvo should be able to help you find an attorney near you who works with startups like this.

  3. Robert V Cornish Jr.

    Contributor Level 16

    Answered . Take a brief look around AVVO and see how many problems have arisen with people drafting their own corporate documents when it comes time to deal with family members, shareholders and the like. What can be done? If you're serious about your business, sit down with an attorney and get your paperwork done right. You will be glad that you did.

    The foregoing is not legal advice nor is it in any manner whatsoever meant to create or impute an attorney/client... more

Related Topics

Incorporating a small business

Incorporation is the act of forming a corporation, a separate legal entity whose rights and liabilities are distinct from its shareholders.

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