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Use A Close Corporation Agreement To Get All The Benefits Of A Corporation Without All The Hassles Of Corporate Compliance

On Behalf of | Jul 23, 2013 | Business Law |

When choosing a business entity, many small business entrepreneurs are resistant to forming a corporation due to the additional compliance requirements. An LLC is an attractive alternative; however, a corporation provides more flexible ownership and potential for future growth.

To alleviate some of the corporate compliance requirements, the person(s) forming the corporation can create a Close Corporation Agreement. Ohio is among a group of states that specifically approves the use of a close corporation.

Essentially, a Close Corporation Agreement allows the shareholders to agree among themselves to operate less formally. They can waive requirements such as annual meetings and electing a board of directors; requirements with which a corporation would otherwise have to comply.

When planned properly, a small corporation can operate similarly to an LLC. Yet, the corporate structure affords the owners more potential to grow their business without having to form an entirely new business entity in the future.

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