Corporate Governance
As a business owner or real estate investor, your primary job is to manage and grow your business. But it is important not to neglect your corporate governance responsibilities. Ignoring corporate governance issues can result in you being personally sued by your partners, investors and by third parties.
What is corporate governance? We see corporate governance as the management of the legal aspects of your business with the goal of reducing your personal exposure to third party lawsuits and claims. Our process for managing the risk of litigation is a follows:
For starters, we get you involved by educating you with regard to your corporate and fiduciary obligations. Experience dictates that it is always easier (and cheaper) to avoid a problem altogether than to resolve a problem which has materialized.
But we also recognize that in today’s world, litigation is far too common. To hedge against this, we may draft (or re-draft) your entity documents in a manner that will protect you personally. We achieve this result in two ways.
First, if someone is going to file a lawsuit, we want to raise the legal bar as high as possible. This may include, for example, provisions in your entity documents which have the affect of absolving you of liability for poor business decisions which you made in good faith, or for
liability arising from your simple negligence as opposed to intentional misconduct.
Second, if you are sued, we want to contractually shift the loss (and the risk) to a third party. The most common method of shifting the risk is through insurance, generally commercial general liability insurance and directors and officers insurance. Another means of
contractually shifting the loss is through an indemnity provision in your entity documents.
When properly drafted, we can shift the risk of most losses away from you personally and to your company.
Lawsuits are a risk in any business. With proper knowledge and training, and with the proper legal documents to protect you, we can minimize those risks.
What is corporate governance? We see corporate governance as the management of the legal aspects of your business with the goal of reducing your personal exposure to third party lawsuits and claims. Our process for managing the risk of litigation is a follows:
For starters, we get you involved by educating you with regard to your corporate and fiduciary obligations. Experience dictates that it is always easier (and cheaper) to avoid a problem altogether than to resolve a problem which has materialized.
But we also recognize that in today’s world, litigation is far too common. To hedge against this, we may draft (or re-draft) your entity documents in a manner that will protect you personally. We achieve this result in two ways.
First, if someone is going to file a lawsuit, we want to raise the legal bar as high as possible. This may include, for example, provisions in your entity documents which have the affect of absolving you of liability for poor business decisions which you made in good faith, or for
liability arising from your simple negligence as opposed to intentional misconduct.
Second, if you are sued, we want to contractually shift the loss (and the risk) to a third party. The most common method of shifting the risk is through insurance, generally commercial general liability insurance and directors and officers insurance. Another means of
contractually shifting the loss is through an indemnity provision in your entity documents.
When properly drafted, we can shift the risk of most losses away from you personally and to your company.
Lawsuits are a risk in any business. With proper knowledge and training, and with the proper legal documents to protect you, we can minimize those risks.