Starting a business in New York can be enjoyable and profitable adventure if you get the business on the right track from the start. Often, companies choose to come together via a joint venture or partnership. With the present coronavirus shutdowns in New York, quality of life issues and New Yorkers fleeing for the suburbs, the market has brought opportunities for creative entrepreneurs. New York is far from dead and the real estate market crash has brought some interesting buying and leasing opportunities. Additionally, in many cases, wages have decreased less than the decrease in the cost of living (since rental prices have dropped).
If you are considering doing business in New York, also, do your due diligence. That article by us on Due Diligence in Korea, is a valuable lesson for your business in New York also. Another article on Due Diligence in New York may, also, be of interest.
Here are some basics that you should consider prior to engaging in business with a partner in New York. All of these issues should be considered before the drafting of the shareholder agreements/partnership agreements. The following list may keep your business in New York out of court and away from the tax man.
Essential Issues to Consider When Drafting a Joint Venture Agreement in New York (Non-exhaustive)
- Duties, responsibilities and expectations of each partner
- Arbitration, language and forum for dispute resolution
- Management & board of director structure
- Valuation, windup, liquidation of Business
- Remedies for breach of shareholder/partnership agreement
- Limitation of powers of interested directors, employees & officers
- Retain power to appoint and remove officers
- Retain majority control or include other minority protection clauses
- Independent accountant and/or utilize a neutral REAL auditor
- Inherent conflicts of interest from outside businesses
- Specific need for the other party in this business
- Giving up based on the partnership/joint venture
- Main purpose of the joint venture
- Inside and outside financing options
- Corporate structure
- Restrictive covenants that may assist or harm you interest in the venture
- How shall this joint venture/partnership in New York help or hinder your other businesses
- Shall you incorporate in New York or Delaware
- If your partner is a foreign national does the company or individual have assets in the States and/or developed country
- Background check on the prospective partner
- The List Goes On. Please read a few more articles below and search this blog. Also, the SBA is, often, useful(www.sba.org).
Hayes & Simon is involved in structuring joint ventures and partnerships in NY, New Jersey, Connecticut, China, Hong Kong, Korea and throughout Southeast Asia.
- Vital Business Agreements Before Starting a Business in New York: NY Startup Basics
- New York Partnership & Joint Venture Due Diligence Checklist
- Doing Business in New York: Listen to My Old Italian Mother to Succeed in Business in New York
- Raising Venture Capital for your Startup or Small Business
- New York Shareholder, Member and Partnership Business Disputes In NY: New York Business Disputes & Litigation Basics
- Buying a Business in New York