Structure for Growth. Armor Against Liability.
Great businesses aren't just built on great ideas; they are built on solid decision-making structures. We help you establish the internal rules that protect directors, manage shareholders, and attract investors.
Actor Portrayal
Why Governance Matters for Private Companies
Many private companies and startups view corporate governance as a burden reserved for Fortune 500s. This is a dangerous mistake. Poor governance is the #1 cause of partnership disputes and pierced corporate veils.
At Saffold Law, we act as outside General Counsel for businesses that have outgrown “handshake deals.” We build the legal infrastructure—bylaws, operating agreements, and board protocols—that ensures your company can survive internal conflict, regulatory scrutiny, and due diligence during a sale.
Common Governance Pitfalls (The "Silent Killers")
Lack of structure creates chaos when things get tough. Here are the most common vulnerabilities we fix:
1. The "Deadlock" Trap (50/50 Splits)
If you and your partner own 50% each and disagree on a major decision, the company freezes. Without a tie-breaker mechanism in your governance documents, your only option may be a judge dissolving the company.
2. Piercing the Corporate Veil
Forming an LLC protects your personal assets (house, savings) from business lawsuits—but only if you act like a business. If you don’t hold annual meetings or keep clear minutes, a court can declare your LLC a “sham” and hold you personally liable for corporate debts.
3. The "Zombie" Partner
What happens if a partner quits working but refuses to sell their shares? Without a “Buy-Sell Agreement” that defines triggers for a forced buyout, you could be stuck supporting a partner who contributes nothing.
4. Accidental Fiduciary Breaches
Directors have a legal duty to put the company first. We often see boards make decisions that accidentally favor one shareholder over another, leading to expensive lawsuits for “Breach of Fiduciary Duty.”
Comprehensive Governance Services
We advise Boards of Directors, C-Suite Executives, and Controlling Shareholders on their rights and responsibilities.
1. Operating Agreements & Bylaws
The “Constitution” of your company. We draft custom agreements that define:
- Voting Rights: Supermajority requirements for major decisions (selling the company, taking debt).
- Board Composition: How directors are appointed and removed.
- Profit Distributions: When and how owners get paid.
2. Shareholder & Partnership Agreements
We prevent “Business Divorce” disasters by establishing clear rules upfront:
- Buy-Sell Provisions: What happens if a partner dies, divorces, or wants to quit?
- Drag-Along / Tag-Along Rights: Protecting minority and majority owners during a sale.
- Valuation Formulas: Agreeing on how to value the company before a dispute starts.
3. Board Advisory & Secretarial Services
To maintain your liability protection, you must document your decisions. We assist with:
- Meeting Minutes: Documenting key decisions to prove they were made properly.
- Corporate Resolutions: Drafting formal authorizations for loans, contracts, and equity grants.
- Conflict of Interest Policies: Procedures for when a director does business with the company.
4. Executive Compensation & Equity
We help structure incentives that align management with shareholders:
- Stock Option Plans (ESOPs): Granting equity to key employees legally.
- Phantom Stock: Bonus plans that mimic ownership without diluting actual shares.
5. Internal Investigations & Compliance
If an allegation of fraud, harassment, or misconduct arises against an executive, the Board must act. We conduct independent internal investigations to mitigate risk and demonstrate a commitment to compliance.
The Cost of Poor Governance
Investing in governance is cheaper than the alternative:
- Uninvestable Status: Venture Capitalists (VCs) and banks will not invest in a company with messy books or unclear ownership.
- Litigation Chaos: Partnership disputes without a governance framework are the most expensive type of business litigation.
- Personal Bankruptcy: Losing your corporate veil means risking your personal net worth.
What We Fight For (Your Outcomes)
Investment Readiness.
When a strategic buyer looks at your company, messy books kill the deal. We ensure your corporate house is clean so you pass Due Diligence with flying colors.
- Asset Protection: Ensuring the Corporate Veil holds up in court.
- Operational Clarity: Removing ambiguity so leaders can focus on strategy, not power struggles.
How We Build Your Strategy
Actor Portrayal
1. The Health Check
We review your existing formation documents. Are your annual minutes up to date? Does your Operating Agreement match how you actually run the business?
2. The Gap Analysis
We identify risks (e.g., “You have no mechanism to remove a bad CEO”).
3. The Remediation
We update your governance documents to reflect the current size and complexity of your business.
Build a Business That Lasts.
Don’t let a lack of structure threaten your success. Contact Saffold Law to professionalize your corporate governance.