Change happens, and your business will face change in the future. How you manage change as a business owner will impact your company’s success and it is important that you are prepared because it all comes down to planning.
Regardless of whether you are selling a business interest, giving it away, or allowing someone to work for your company in exchange for ownership, it is necessary to have proper documentation. If you want to change ownership in your company, the first thing you have to do is look to your governing documents (bylaws, shareholder agreement, operating agreement) for guidance. If drafted properly, these agreements will outline the steps you have to take to change ownership interest. If you don’t have one, or if you have a generic agreement downloaded from the internet, you will still want to make sure that you properly document the action you are taking, usually involving a vote from each of the owners held during a special meeting called for the occasion.
It will be important to update the operating agreement as well as any internal documents that refer to ownership and/or management such as an internal partnership agreement. The operating agreement should be revised to include all of the details of your partner’s investment amount and the percentage of ownership the partner receives in consideration of the investment.
Contact a Houston Business Contract Attorney
Ultimately, the steps to take to from one type of business to another depend on the type of business entity. Specific steps change whether the business entity is a corporation or LLC. The best course of action when dealing with the sale of a Houston company or adding owners is to consult with experienced to ensure correct due diligence. It is also imperative to have the proper tax and legal advice before you take any steps and to make sure that everything is properly documented in writing. The skilled Houston attorneys at the Weisblatt Law Firm are well-versed in business contracts and can help you sell or change ownership of your business. Contact our office today at 713-666-1981.