Legal Question in Business Law in Maryland

Re: starting a buissness with a partner

If you a creating a Limited Liability Company, then you need a well written Operating Agreement that addresses issues such as a super voting majority requirement to undertake or approve major transactions. I usually have a list of 30 to 40 major transactions needing a super majortity vote. You also need buy out provisions in the event that any dispute over a major transaction does not get resolved. In addition, you need buy sell provisions for death or disability of one of the partners.

If you are creating a corporation, you have the same concerns, only they are addressed through a shareholders agreement.

Most importantly, please create the entity in Delaware not Maryland! If you get into a fight with your partner, the Delaware Court of Chancery is probably more likely to honor alternative means of resolving disputes than is a Maryland Court. Even if not, the Delaware Court of Chancery decides almost all of its cases in 8 weeks. The waiting period in Maryland Court is much longer. If you ever get into a dispute with your partners, you can resolve it more inexpensively through a Delaware entity.