00:00:00

Taylor: When you’re a business owner, you’re surrounded by risk.

00:00:03

Paul: At any given moment, you could be hit with a lawsuit or other legal claim. From a customer, vendor, employee, or even your own business partner. Hi, my name is Paul Zimmer

00:00:12

Taylor: And I’m Taylor Rens. Zimmer & Rens LLC is a Wisconsin real estate and business law firm that helps southeastern Wisconsin individuals protect their real estate and business investments.

If you’re starting a business with a partner or with multiple business partners, it’s important to have a thorough operating agreement in place at the outset to set forth the rights, responsibilities, and obligations of each owner.

In my experience, upset expectations are the core of most disputes that take place between co-owners of a business. For example, what happens if one owner wants to exit the business and sell his or her interests earlier than anticipated? What if the company’s revenue is insufficient to pay the business’s expenses? Or what happens if one of the members dies gets divorced? Files bankruptcy. How much of the profits should go to reinvestment in the business versus distributions to owners? Setting uniform expectations at the beginning of the business greatly reduces the risk of irreconcilable conflicts arising among the owners.

00:01:09

Paul: And even if you don’t have any business partners, every business should ensure that the form contracts that they use with their customers, vendors or other third parties are written in the most advantageous way possible. Nobody gets into business to get sued, but lawsuits do happen, and that’s why you need to protect your business, because you could be one outside creditor or disgruntled employee away from a mistake that could cost your business dearly in the long run.

At the end of the day, it’s a lot less expensive to plan and prepare ahead. Try to avoid legal disputes from arising in your business than it is to resolve legal claims after they’ve already arisen.

00:01:44

Taylor: Take John and Jack, for example. John and Jack were best friends who decided to start a real estate fix and flip business together. John and Jack started off great, but when the market took a turn and their business started losing money. John wanted to double down and invest more funds into the business and try to turn a corner. While Jack wanted to sell the company’s assets, shut down the business and just cut their losses. But John and Jack did not have an operating agreement to address how they would resolve the deadlock.

This ultimately resulted in not only hurting their business, but also their long-time personal friendship. If John and Jack had consulted with an experienced attorney at the outset of their business venture, they could have created a written operating agreement containing provisions designed to fit their relationship and expectations for the business. That way, when they started losing money and having disagreements about the direction of their business, their agreed upon written document would have been in place to help sort out how to proceed in light of the disagreement.

00:02:41

Paul: Simply put, without solid written agreements in place with your business partners and with the other businesses and individuals that your business interacts with, your business is vulnerable to any legal claims which can be devastating not only to your business, but to you personally and financially. We just hate to see it when good people have worked hard to develop a business or real estate investment, but they’re not protected.

With our clients, we’re not just their attorney. We become part of their team. Whether you’re trying to start a business, planning to buy or sell a business, or need help navigating the law within an existing business, we provide a one stop option for your business law needs.

00:03:18

Taylor: So, call your friends at Zimmer & Rens. And one of our team of Wisconsin business lawyers would be happy to have an initial free consultation with you.