Business Organization Attorneys in Fairfax, Virginia
“Begin With the End in Mind”-Stephen Covey
In starting a new business, you need to outline what you want the results of the new business to be before you start the business.
A crucial requirement for success is how you will structure the business. That is: What will be the form of the business? A corporation or a limited liability company? Who will be the owners and the managers? When will a vote be required on what issues? This will mean that your prospective partners will need to talk about management and structure and come to some agreements that will be their business structure.
The Farley Family Farm Becomes a Business.
Mom and Dad died and left their six children equal interests in the Farley Family Farm and contingent real estate in Iowa. In recent years, a local farmer had farmed the land and paid the parents their share of the net profits. Now, the six children-Sally, Dave, Ellen, Fred, Eric and Nancy-faced being in partnership with each in a farm in Iowa, together with the Farley family home and a separate house when Nancy lives with her husband and children. Only Nancy lives in Iowa and none of the siblings are farmers. Tensions were high. Would the Farley Family fracture with bitterness that would not be dissolved for decades?
The consulted us as to how to get organized. Sally, Ellen, Allen, and Eric decided they would transfer the operating farmland to an LLC for management and asset protection. Dave is a sharp wall street executive and wants to sell the farm because Dave could make more money on Wall Street than in the farm which will produce low income and only long-term growth in asset value. Nancy wants to receive just the part of the farmland where the house is that she lives in with her husband and children. Nancy wants to continue to operate her busy in town bake shop and not farm the land.
After meeting and talking it out, Sally, Ellen, Allen and Eric decide to form an LLC that would operate the farmland and own the Farley family home. They decided that Sally and Allen would be the active managers, and all four would have a one quarter interest in the LLC with a vote on major matters. They split off the land where Nancy lives and buys out Nancy one sixth interest in exchange for a deed to the house she lives in. The remaining four buy out stock trading Dave. As result of this process, what could have been a fractious family feud was resolved with family feelings intact. Every year, all six siblings spend a long weekend at the Farley family house raising a toast to Mom and Dad, celebrating memories of growing up in the Farley family house and watching their children playing together, building build new bonds and memories for the next generation.
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