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Ensuring proper corporate governance is an essential part of starting a company. Whenever a company takes on the structure of a corporation or an LLC, it is essential to ensure that the corporate officers and board of directors take steps intended to benefit investors and shareholders. The concept of corporate governance covers this mind set.
In many situations, the advice of a business formation attorney can be useful in achieving this goal. A Washington DC corporate governance lawyer could help start-up corporations create structures designed to benefit both the decision makers of the company and its shareholders. This can be especially vital for small businesses where a limited number of shareholders may place their entire financial future into the hands of the company.
The concept of corporate governance describes the methods that shareholders and investors can take to ensure that the company acts in their best interests. This is especially important in companies formed as corporations or LLCs because these entities have boards of directors that make decisions on behalf of the company.
Specifically, the Code of the District of Columbia § 29-306.01 requires all entities created in the District to have a board of directors. In addition, DC Code § 29-306.30 creates a legal duty for these directors to act in good faith and in a manner that serves the objectives of the company. Directors that fail to adhere to this duty may create personal liability on the part of the director to the company. However, this liability is only possible if the articles of incorporation specifically create it. As a result, effective corporate governance is essential to protecting the interests of the founders of start-ups and small businesses. A lawyer in Washington DC could explain the importance of corporate governance when a business is in the formation stages.
Having a plan for corporate governance is essential long before a company goes into business. District law requires corporations to submit their articles of incorporation with the Mayor’s office. These articles should include sections that create liability for directors who fail to act in the best interests of the company. A Washington DC attorney could take the lead in the drafting of these articles in a way that leaves no ambiguity concerning the role and obligations of directors, creating the opportunity to achieve corporate governance.
An attorney from our firm could also provide legal services after the creation of the corporation. A lawyer could evaluate the actions of directors to determine if they have violated the articles of incorporation. In addition, they can take the necessary legal action if a violation has occurred. Overall, an attorney could provide essential guidance for start-ups and small businesses during its formation stages as well as years into the future.
The moments leading up to the opening of your corporation or LLC are vital to establishing your legal rights. The articles of incorporation form the backbone of the company’s operating plans and bind directors and other officers to act in the best interest of the corporation. Drafting clear and comprehensive articles is essential to your company’s present and future.
A Washington DC corporate governance lawyer could help with this process. From drafting comprehensive articles of incorporation, to defining the roles of directors, to pursuing remedies if breaches occur in the future, we are ready to help you. Contact our legal team today to learn more about how to achieve corporate governance for your small business or start-up.
The Law Offices of Jay Gupta
