Creating a corporation takes paperwork,
and it s easy to leave the job of wrestling
with shareholder agreements and
other paperwork for some other day, says
lawyer George Sinker. The accountant
advises, letters are sent, and agreements
are drafted. Then April hits, the dirt starts
flying and the drafts sit unsigned.
Sometimes farm families procrastinate
because they don t want to talk
about the possibilities of bad things happening
to the people they care about. It
forces them to come to the table to talk
about the four Ds disability, death,
disagreements and divorce, says Sinker.
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Sinker actually sees that as a benefit,
looking carefully at how you do business.
Whether it s a shareholders agreement
or written partnership agreement, a written
format will help ensure execution
during changed situations.
There s no such thing as simple
if there s more than one individual
involved in a business, says Sinker.
Making it even more complex, those
agreements need to be reviewed when
there are changes on the farm. For
example, during succession planning
you might need to rewrite how shares
are bought and sold.
The result, however, is that you ll be
better prepared for life s eventualities.
There s no agreement we put forth
that will allow us to avoid death. It s
going to happen of course, Sinker says.
But a well-crafted agreement makes
the transition on death much easier
because you ve dealt with it by having
rules of transfer.
