Protecting Minority Owners in Closely Held Businesses
Noted Chicago business attorney and speaker David Staub presented a program "Protecting Minority Owners in Closely Held Businesses" to a crowd of Chicago business lawyers at the April meeting of the Business Law Committee of the Chicago Bar Association. The program was also viewed online live via the CBA's website and a video recording will be available for subsequent viewing, also on the CBA website.
In his presentation, attorney Staub identified the common law and statutory rights of a person who owns a non-controlling interest in a closely held corporation or limited liability company. He went on to explain why those rights are inadequate to fully protect the minority owner in many, if not most, situations. The alternative, he said, is to provide contractual protection for the minority shareholder.
Mr. Staub laid out the various contractual arrangements available in which a careful corporate attorney can incorporate appropriate protective provisions. He then identified and discussed dozens of specific provisions that a lawyer representing the minority owner should consider when reviewing or drafting the relevant corporate or LLC documents.
He concluded his presentation by reiterating that common law and statutory protections simply are not sufficient to protect minority owners. A careful business lawyer, he said, must provide contractual provisions to fill the gaps.
A copy of the PowerPoint presentation "Protecting Minority Owners in Closely Held Businesses" can be viewed below.