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Miami Shareholder / Operating Agreements
A good shareholder agreement is the most significant building block on which to found the business. A good shareholder agreement ought to be put in place to ensure that the business runs smoothly. However, many issues emerge when drafting the shareholder agreement. These include buy-ins, buy-outs, operations, finance, and other relative matters.
However, other issues may emerge that are not usually contemplated when entering into a shareholder agreement. The fine print may not cover certain situations in court. That is why an experienced attorney is integral in drafting a proper shareholder agreement.
When stock corporations are organized, one of the most important documents is the shareholder operating agreement. This document will determine how the company will conduct certain business affairs and who may determine the direction that the business will take. Depending on how this agreement is drafted, the potential of shareholder lawsuits can be minimized.
The choice is clear: if you want to ensure the best future for your business, get in touch with an experienced Miami business law firm today. The last thing you want is to gamble with the fruits of your labor. Many businesses have suffered because they lacked competent counsel in one of the key areas we’ve mentioned above. If you don’t understand the contract formation process, you can end up establishing inadequate terms; if your operating agreement is poorly constructed, you will leave yourself vulnerable to potentially costly disputes in the future.
No matter what type of assistance you need, we approach every client relationship with the same level of professionalism, integrity, and commitment to excellence. We work hard to establish clear communication with you so that we can better understand and meet your business needs. This enables us to deliver superior results and build the groundwork for a lasting partnership.
Shareholder Disputes In Miami
South Florida is a hotbed of corporate litigation and shareholder litigation. This is due to the city of Miami being an international hub for business. Its ports and proximity to South American countries make investments lucrative for interested capitalists.
Consider this case, in March 2020, a shareholder lawsuit was filed against Norwegian Cruise Lines by a plaintiff in Miami who complained that the company misrepresented the potential impact of the coronavirus pandemic on its operations. This particular lawsuit was shaping up to reach class-action status very quickly.
Such a suit is something that can be prevented with the right shareholder operating agreement in place. You want to protect yourself from litigation. Although the Norwegian Cruise Lines lawsuit was filed in federal court, the Miami-Dade County courthouse is often busy with shareholder disputes.
When it comes to corporate disputes and lawsuits, Miami has the distinction of operating a Complex Business Litigation division for cases that become complicated and cannot be resolved by means of mediation and arbitration. When corporate lawsuits are filed by their own shareholders, things can get complicated, but this is something that can be avoided with the right shareholder operating agreement.
It is important to keep in mind that shareholder agreements must be executed in practice.
“Executed into practice” means that the rights of shareholders must be upheld at all times. Sometimes this fails to happen because of malfeasance or lack of good faith. In that case, derivative lawsuits can be filed against the corporate board. This was the case in the aforementioned Norwegian Cruise Lines lawsuit.
Shareholder Operating Agreements In South Florida
Shareholder agreements need not be complex; however, they must present the right amount of detail in order to prevent lawsuits. On the other hand, you do not want to draft a shareholder operating agreement to be so strict and onerous. If that happens, the shares of the company will become unattractive to prospective investors.
Are you a shareholder of a corporation and concerned about how the corporate officers are managing the business? Are they not providing information to shareholders like you? Then you ought to hire the right legal team to assist you.
Shareholder Rights Investigations, Breaches and Lawsuits Attorney Serving All Florida (Office in Miami) – How We Help Shareholders:
The right attorney will help clients deal with a myriad of issues, including the following:
- The rights and obligations of majority and minority shareholders, officers, and directors
- Understanding corporate procedures and compliance, voting, resolutions, and other procedural issues
- Conflict resolution, including negotiation, mediation, and arbitration
- The need for proactive procedures to ensure officers and directors are behaving in good faith and in the best interests of the corporation
- How to deal with unfair or illegal actions, fraud, breaches of fiduciary duty, trade secrets, and unfair competition
- Employment questions, including compensation, severance, pension benefits, stock plans, and more
- Defending and protecting your rights as a corporate shareholder
- Handling shareholders’ derivative lawsuits
- Conducting inquiries into the protection of rights as shareholders
Contact Trembly Law for More Information on Shareholder Law
Trembly Law is dedicated to protecting the rights of business owners, corporations, business partners, and shareholders. We will counsel you and provide the necessary legal advice to navigate lawsuits and other situations.
Get in touch with our office today to learn more about how we can help ease your shareholder agreement concerns. The Trembly Law Firm will assist you in drafting the correct and proper shareholder agreement once and for all.
Basic Overview of Shareholder / Operating Agreements
Whenever you form a corporation, the shareholder operating agreement is among the most important documents you will create. Shareholder operating agreements serve two primary functions: (1) these agreements provide the basic guidelines on how the corporation will handle most of its critical business affairs, and (2) these agreements prevent undesirable litigation by minimizing shareholder disputes. Shareholder operating agreements not only help the corporation run smoothly, they prevent costly lawsuits which could otherwise come about through shareholder dissension over certain issues.
The individual shareholders of a corporation are likely to have their own preferences when it comes to various business affairs, such as internal operations, raising capital, buy-ins, buy-outs, and others. The shareholder operating agreements attempts to bring all these different preferences into alignment so that the company can make progress and move forward. However, not all shareholder agreements are of the same quality; some agreements fail to account for certain things, and others fail to reflect certain interests which are important to shareholders. Given this reality, shareholders sometimes initiate lawsuits when an inadequate agreement causes them to suffer damages.
At the Trembly Law Firm, we have significant experience dealing with shareholder operating agreements in the Miami area. We can help clients develop workable shareholder agreements which can minimize the probability of shareholder litigation.
Disputes Occur Often in Miami
The City of Miami is not a stranger to shareholder litigation. There are many reasons for this fact, one of them being Miami’s proximity to South America and other attractive destinations. Miami is an international business hub and a magnet for serious investors; given all this ambitious corporate activity, it follows that some disputes are going to arise. This is all the more reason why you need a solid operating agreement for your Miami-based business.
Consider the following example. Back in March, a shareholder lawsuit was launched against a Miami cruise company, Norwegian Cruise Line, alleging that the company made false representations to customers regarding the COVID-19 virus and engaged in deceptive sales tactics. After the COVID virus began to grow, cruise bookings began to plummet. As a consequence, Norwegian Cruise Line saw a massive drop in its stock performance. The lawsuit claims that, to ease investor anxiety, the cruise company relayed false information to shareholders about the potential economic impact of the virus, and engaged in deceptive sales practices to secure bookings from customers. This is just one example among others of recent shareholder litigation in the Miami area.
Corporate Litigation & Derivative Rights
When shareholder disputes arise, the usual practice is to attempt to resolve the matter by either a mediation or arbitration. These routes allow the matter to be resolve with minimal cost. However, in complex cases, disputes may end up being handled by the Complex Business Litigation division in Miami. This is a special department designed to assist with complicated business disputes, including shareholder lawsuits.
One of the most essential aspects of a shareholder agreement is that it upholds shareholder rights at all times. In some cases, shareholders may feel as though their rights were not upheld by the corporation, because of either misbehavior or bad faith, and this can lead to litigation. This type of litigation is referred to as derivative rights litigation, and this was precisely what we saw in the recent Norwegian Cruise Line case.
How Trembly Law Firm Can Help Shareholders
The business lawyers at Trembly Law Firm can assist you in developing a workable shareholder operating agreement which will promote efficiency and guard against undesirable disputes. What’s more, we can also assist you in the event that you feel that your current shareholder rights are not being respected by your corporation.
An ideal shareholder operating agreement creates a sort of “middle ground” which has some flexibility, but is also strict enough that disputes are not likely to arise lightly. If you create an agreement which is overly strict, you may end up becoming unattractive as a prospect to future investors. On the other hand, your agreement needs to create some predictability so that shareholders have common expectations about how the company will operate. If there is too much room for misinterpretation, disputes may arise.
Trembly Law is pleased to be able to offer assistance in the following ways regarding shareholder operating agreements:
- Defending the rights and obligations of shareholders, both majority and minority, as well as officers and directors
- Understanding the various procedural and compliance issues in corporate settings
- Resolving conflicts by assisting with negotiation, mediation and arbitration
- Developing proactive measures to guarantee that all corporate officers are acting in good faith
- Addressing instances of potential illegality, fraud, bad faith, breach of fiduciary duty, confidentiality violations and unfair competition
- Employment related issues, such as severance packages, pensions, stock compensation plans, and so forth
- Assisting with derivative rights lawsuits
Contact Trembly Law Firm Today
The business lawyers at Trembly Law Firm have the potential to add significant value to your firm by assisting with your shareholder operating agreements. Furthermore, we can work with you in myriad other ways to ensure that your shareholder experience is optimized. If you need assistance in any of the areas we’ve discussed, get in touch with us today.
Frequently Asked Questions
South Florida Business Attorney Brett Trembly addresses commonly asked business law questions in his Video of the Month series. If you have any questions for us, or if you need immediate legal assistance, please contact us today.
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