1. Initial Consultation and Cap Table Assessment
We begin by reviewing your cap table and existing investor involvement. This assessment identifies immediate structural risks before drafting begins.
Cap Table Review
We map out the equity distribution among founders and early investors. A clear view of current holdings prevents dilution issues during future financing rounds. We identify exactly who holds voting rights versus purely financial interests.
Venue Considerations: Delaware Vs. New York
Manhattan-based businesses frequently choose between incorporating in Delaware or forming a New York LLC. We evaluate your specific venue considerations to align the agreement with your entity type.
| Entity Type | Typical Governance Document | Key Characteristics for Businesses |
|---|---|---|
| Delaware C-Corp | Bylaws & Shareholder Agreement | Preferred by venture capital and private equity investors. |
| New York LLC | Operating Agreement | Flexible tax structure suitable for smaller joint ventures. |
| New York C-Corp | Shareholder Agreement | Governed by the Business Corporation Law for local operations. |
2. Discovery Phase and Information Gathering
Thorough discovery forms the foundation of a durable contract. We collect data on expectations regarding corporate governance and exit scenarios.
Interviewing Shareholders on Vesting
We interview key stakeholders to clarify their vesting schedules and buyback triggers. Aligning these expectations early reduces friction during the drafting process. We establish timelines for when shares fully vest and when the company can repurchase unvested equity.
Due Diligence on Prior Promises
We conduct due diligence on any prior side letters or informal equity promises. Uncovering these early prevents hidden liabilities from disrupting future funding rounds. Addressing past verbal agreements ensures the new contract accurately reflects binding obligations.
3. Drafting Specific Governance Clauses
During the drafting phase, we build internal working drafts. We include stakeholder annotations and specific governance clauses designed for your operational needs.
Aligning with Statutory Requirements
We coordinate the drafted terms with your existing corporate bylaws or New York Limited Liability Company Law requirements. This alignment prevents contradictory rules that could paralyze corporate decision-making. We ensure that voting thresholds match your entity's underlying statutory requirements.
Milestone Circulation and Feedback
We circulate milestone drafts to key shareholders. Breaking the review process into stages helps manage revisions efficiently.
- Establish section-by-section review windows.
- Consolidate feedback from multiple stakeholders.
- Revise the text to reflect the agreed modifications.
- Identify unresolved legal issues for the next negotiation round.
4. Managing Shareholder Consensus and Disputes
Drafting often reveals conflicting preferences on exit strategies and control mechanisms. We address these disagreements by structuring precise legal mechanics.
Resolving Drag-Along and Tag-Along Conflicts
We negotiate drag-along, redemption, and tag-along rights. If your company involves institutional investors, we handle their specific mark-ups. Venture capital firms typically require strict veto rights and preferred return clauses before committing funds.
Mediating Founder Liquidity Disputes
We mediate founder disputes on liquidity scenarios. Defining the exact exit tax treatment and valuation methodology upfront reduces the risk of future litigation. Clear buy-sell provisions handle death, disability, or sudden founder departures effectively.
5. Modifying Statutory Defaults under New York Law
New York law provides default rules for corporate governance if you lack a customized agreement. We draft provisions that override unfavorable statutory defaults under the New York Business Corporation Law or Limited Liability Company Law.
Tailoring Fiduciary Duties
The law imposes strict fiduciary duties on corporate officers and majority shareholders. We define and tailor these duties within the agreement to suit your specific business model. This protects founders from routine operational lawsuits regarding corporate opportunities.
Statutory Valuation Rights in Buyouts
Without an agreed valuation formula, departing shareholders may rely on statutory fair value proceedings. These judicial proceedings are expensive and unpredictable. We insert specific appraisal methods to control the buyout price internally and prevent court intervention.
6. Post-Closing Administration and Compliance
Once negotiations conclude, we manage the final signature logistics. Proper execution ensures the document is legally binding and enforceable against the involved parties.
Signature Logistics and Execution
We implement electronic execution protocols and coordinate witness timing. We manage the exchange of signature pages among geographically dispersed investors. We also handle any necessary recording requirements with the relevant state departments.
Ongoing Corporate Governance
After the documents are live, we assist in setting up the shareholder registry. We establish an amendment tracker and compliance calendar for your ongoing governance obligations. This infrastructure keeps your corporate records accurate for future audits.
24 Aug, 2026
