When entering a business, there are many considerations to take into account. Unfortunately, what many entrepreneurs consider to be smaller decisions turn out to have huge implications on the life of their business. This is true regardless of the business type. One such consideration is the duration of the business; that is, whether it will be at will or for a term. While seemingly small, this is a big decision that should require careful consideration.
Deciding whether your business will be at-will or for a term refers to whether or not the duration of the business will be perpetual. In essence, all parties involved should come together and decide whether or not the business should have an indefinite duration. The decision can impact the freedom of the business. For example, a company that is for a certain duration will not be allowed to be dissolved absent extraordinary circumstances. If the purpose of a company has not come to fruition, a court is hesitant to grant a dissolution. In an at-will company, when all of the owners decide to bring the company to an end, a court will grant the dissolution absent extraordinary circumstances. Additionally, partners can petition a court on their own to have a company dissolved.
There are still further important implications from deciding whether your company will be at-will or for a term. In a partnership, for example, a partner cannot cause a dissolution during a partnership for a term. If the dissolution causes damages, that partner is solely responsible to reimburse the other partners for any costs associated. In a limited liability company, for example, the dissociation of a member of the LLC will dissolve the company absent certain circumstances. Therefore, there are implications for whether or not your company is at-will or for a term other than just flexibility.
In conclusion, it is important to decide whether your company will be at-will or for a term. The implications are huge and can vary from business type to business type. Consulting with an experienced legal team can determine what type of duration may be in your company’s best interests, and ensure that it is included in your company’s applicable agreement. Call the Trembly Law Firm at (305) 431-5678 today to schedule your consultation.