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Shareholders, partners: sometimes thorns accompany the roses

Smart and focused business entrepreneurs are constantly emerging in California and elsewhere with exciting new ideas that they seek to turn into profitable realities. In order to do so, they often band together as shareholders or partners in new enterprises.

A lot of hard and exacting work obviously goes into that, with initial questions abounding. What type of business form should a start-up opt for? What formational contracts need to be executed, and what should they say? What will the expectations be for each company principal? Is there unanimity concerning what the business goals should be five or 10 years down the road? How will the enterprise deal with important issues surrounding dissolution, buyouts and additional matters?

Such questions underscore a central duality inherent in virtually every business, namely this: Opportunity looms, but so too does the potential for future business conflict across a wide spectrum.

Our attorneys at the Pasadena business law firm of Larson & Gaston, LLP (with offices in Salt Lake City, Utah, also), routinely represent corporate clients with business disputes of every conceivable sort.

Truly, those matters are wide-ranging. Company executives might have sharp disagreements regarding the direction in which a business should be headed. Evidence might surface concerning a breach of fiduciary duty on the part of a shareholder or partner, or perhaps the commission of one or more fraudulent acts. Poorly drafted contracts might have failed to address key business matters that have now festered into open wounds.

Whatever the issue, experience has taught us that it is important to take an objective and long-term view that focuses on dispute resolution "that is most conducive to long-term business goals."

The aim is to put out fires, not burn bridges.

We welcome readers' input on our blog posts, as well as questions regarding specific business concerns.

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Larson & Gatson

Larson & Gaston, LLP 200 South Los Robles Avenue
Suite 530
Pasadena, CA 91101
Tel: 800-671-8756 Fax: 626-795-0016
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4001 South 700 East
Suite 500
Salt Lake City, UT 84107
Tel: 800-671-8756 Fax: 626-795-0016
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