Ownership & Governance

A business owned by more than one person runs on an agreement about how it is owned and controlled, whether the owners ever wrote one down or not. If nothing is in writing, New York’s default rules for LLCs, corporations, and partnerships fill the gap, and those default rules rarely match what the owners actually intended for their business. A governance document, an operating agreement for an LLC or a shareholder agreement for a corporation, replaces the state’s default terms with rules the owners chose themselves.

These documents do their most important work before there is a disagreement to resolve. Owners who trust each other at the start of a business are the ones best positioned to decide, in writing, what happens if a partner wants out, stops contributing, becomes disabled, or dies, while the question is still hypothetical. Fisher Stone prepares and reviews operating agreements and shareholder agreements for New York business owners, for a flat fee, quoted up front, with a licensed New York attorney handling the matter from start to finish.

What ownership and governance documents decide

An operating agreement and a shareholder agreement cover the same basic ground, even though they apply to different types of entities. Both are meant to settle, in advance, questions that cause the most damage when they are left open:

• What percentage of the business each owner holds
• Who has the authority to make which decisions, and what requires a vote
• How profits, and losses, are shared among the owners
• What happens when an owner wants to leave, retires, becomes disabled, or dies
• How a deadlock between owners who cannot agree gets resolved
• What restrictions apply before an owner can sell or transfer their stake

None of these questions has one correct answer that applies to every business. The point of the document is to settle them once, on terms the owners agreed to, instead of leaving them open until a dispute forces the issue.

Which document applies to your business

New York requires every LLC to adopt a written operating agreement, and it is the document that governs ownership and decision-making among the members. A corporation instead operates under bylaws, which set out how the board and officers function, and a shareholder agreement, which most closely held corporations also need in order to address the ownership and exit questions that bylaws do not fully cover.

Each document is covered in full on its own page: see our guide to operating agreements for LLCs, and our guide to shareholder agreements for corporations.

Why put these terms in writing early

The best time to sign an operating agreement or a shareholder agreement is when the business is formed, while the owners still agree on almost everything and no one yet knows which side of a future dispute they will be on. Waiting until a disagreement has already started means the owners are negotiating those terms in the middle of a live conflict, when each side has a specific outcome to win and little reason to give ground it is not required to give.

A governance document also needs to be revisited as the business changes. An agreement written for two founders does not automatically fit once the company takes on a third owner, brings in an outside investor, or grows well past what it was when the original document was signed. Reviewing the agreement at these points keeps the business’s actual ownership and control in line with what is written down.

How Fisher Stone prepares these documents

Fisher Stone drafts operating agreements and shareholder agreements as part of forming a new business, including a new LLC or a new corporation, and updates or replaces them for businesses that are already up and running. The same review applies when owners are bringing in a new owner or preparing to sell, or when a company is winding down through a dissolution and the existing agreement controls how that happens.

Every document is prepared or reviewed directly by a licensed New York attorney, not filled in from a generic template. The details specific to each document, including what New York law requires in an LLC operating agreement and how a shareholder agreement in a closely held corporation typically handles a buyout, are covered on their own pages, alongside the rest of Fisher Stone’s business law practice.