Corporate Governance
While often overlooked by early stage businesses, corporate governance plays an important roll in a company's ability to remain organized, efficient, and compliant with various laws and regulations. By maintaining long-term relationships with our clients, we are able to familiarize ourselves with their organizational structure and key documents thereby reducing costs while helping to ensure that their corporate governance remains up-to-date.
Avoid Wasted Time and Money Down the Road
Implementing proper corporate governance now can help avoid costly problems down the road, such as:
Unauthorized issuance of stock. The amount and types of stock that a corporation can issue should be set forth in its corporate charter. Corporations that issue stock in excess of the amount authorized or with rights not identified in its charter risk such issuances being void, which can potentially lead to liability for its officers and directors and may be challenging to correct.
Failure to obtain the proper consents. A company must obtain consents from stakeholders, such as directors or shareholders, to take certain corporate actions. Failure to obtain such consents can create derivative claims and render certain actions voidable.
Failure to provide proper notice. Relatedly, companies must provide sufficient advance notice before holding board or shareholder meetings. Failure to properly notice meetings or provide proper notice in connection with written consents may similarly result in actions that are legally ineffective.
Governance Creates Transparency and Synergy
By implementing proper corporate governance, a company's officers, directors, and shareholders are able to easily understand their rights, obligations, and organizational roles thereby avoiding conflict and ensuring everyone is working toward the same goals. Not only will this save the company time and money, but it will make the company more attractive to potential investors and buyers.