COMMUNICATION IS KEY

Many business disputes start because of a breakdown in the lines of communication.  While most businesses start with two or more owners all on the same page and either family, friends or acquaintances, for whatever reason while the calendar pages of business ownership change, the communication suffers.  Member/manager or shareholder/director meetings stop happening.  And next the open dialogue in the office is now hidden behind closed doors.  Then, accusations start and now someone wants out or is asserting claims against the other.  How do we prevent such breakdowns?

If your internal governing documents (operating agreement for a LLC and shareholder agreement for a corporation) set forth the frequency of meetings, it is important to follow those.  Make sure you have your member/manager or shareholder/director meeting monthly, quarterly or annually as set forth in your governing documents.

But more importantly, I suggest having at least a monthly meeting for the owners to all touch base on where things are at.  This helps each owner be up-to-date on the happenings of the business, to share ideas, and to make sure everyone is still rowing in the same direction.  Just as in other types of relationships, when communication is lacking, problems commence.  Having these types of (at least) monthly meetings will help catch problems early and before problems fester and will help ensure an ongoing and viable business long into the future.

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