If you own a small business in Massachusetts or Rhode Island with one or more co-owners or partners, you should have an operating agreement drafted by a Massachusetts or Rhode Island small business attorney. Among other things, an operating agreement spells out each partner’s ownership interest, rights, and duties, as well as procedures for resolving disputes; transferring or selling interests; liquidating the business, etc. An operating agreement should also include “buy-sell” provisions, backed by appropriate insurance, which allow a partner’s interest to be bought out, including if the partner dies and is survived by someone not willing or qualified to help run the business.
By carefully setting forth these matters, a well drafted operating agreement provides business partners with a structure for managing virtually any circumstance. The agreement also helps ensure that if the partnership ever turns sour, there is an orderly procedure in place for resolving disagreements and even ending the partnership. Obviously, the best time to negotiate and draft an operating agreement is while the partners are on good terms and the relationship is strong. An experienced Rhode Island or Massachusetts small business attorney will help you and your partners proactively address those issues most relevant to your business.