Agreements and Contracts
Every business needs agreements and contracts. Perhaps the most important agreements that any business will need are an operating or shareholder agreement and bylaws. An operating agreement governs important matters like voting rights, appointment, and the election of officers and directors, distribution of income, termination of membership, withdrawal of members, arbitration and litigation, and dissolution. Operating agreements dictate how the company will be run and are important no matter how small a business you are running. Regardless of the type of business, agreements, and contracts are essential to help your business operate.
In addition to written agreements and contracts effectively memorializing a verbal agreement and mitigating the chance of conflict, the New York State Statute of Frauds General Obligations Law §5-701 requires that many contracts be reduced to signed writing in order to be enforceable. The lesson to be learned here is that if you make an agreement with someone, be it an agreement to have them ship you inventory or an agreement hire an outside contractor, make sure you have it in writing and have an experienced business attorney assist you.