Closely Held Businesses

Enhance the Opportunities, Avoid the Obstacles

95% of American businesses are family-owned.  Those family-owned American businesses generate 40% of the Gross National Product. 

35% of the 500 largest companies in the U.S. are family-owned.
 
Only 57% of owners of family-controlled businesses intend to transfer the business to family members.  Only 30% of family businesses survive into the second generation. 
 
More than 50% of the business owners have more than half of their wealth tied up in their business. 

These statistics demonstrate the great business opportunities that can be found in closely held businesses as well as the need for guidance to navigate the inherent pitfalls that can trap the unwary.  Lommen Abdo's business attorneys focus on the needs of closely held businesses, including how to avoid legal disputes, how to avoid personal liability, the importance of well drafted buy-sell agreements, the value of thoughtful succession and exit planning, and understanding shareholder disputes or business divorces and how to best resolve them. 
 
A closely held corporation is any corporation whose shares are held by a relatively small number of shareholders.  The Minnesota Business Corporation Act defines a closely held corporation as one which does not have more than 35 shareholders.  Another popular definition states that a close corporation is a corporation whose shares are not generally traded in the securities market.  Most closely held corporations are small to medium-size business enterprises where all shareholders tend to be active in the management of the business.  The closely held corporation can provide many of the advantages of including limited liability for shareholders and S corporation election for tax purposes while retaining many of the simplified, less formal operating procedures of sole proprietorships and partnerships.  
 
Closely held businesses often elect to work with law firms rather than hiring an in-house counsel to work within the company.  Lommen Abdo brings the expertise of an in-house counsel to its clients; serving as the “outside” general counsel by providing prompt, responsive and cost effective advice on a spectrum of legal needs.  For instance, our attorneys provide advice on: 

    The Tuttle brothers own and operate a third generation family business started by their grandfather: Tuttle’s Bowling Bar & Grill, Elsie’s Restaurant, Bar & Bowling Center and Memory Lanes & Flashback Café.

    The Tuttle Team at Elsie's: Tim Tuttle; Dan Young, Lommen Abdo; Mike Tuttle; Bill Belvedere, Schechter Dokken













    Tim says, “My brother and I have been in the business our whole lives, but our entertainment centers continue to challenge us every day.” Mike adds that “as our business keeps growing, so do our successes and challenges and, as they do, we have come to rely on our accountant and business lawyer as our trusted advisors.” The brothers engage these advisors to meet short- and long-term business objectives as a team. Dan Young values his role as trusted advisor to the Tuttle’s team, a team that succeeds in the competitive business of entertainment centers.     
  • enterprise formation and structure,
  • daily operational and governance aspects of the business organization,
  • commercial transactions,
  • real estate leasing,
  • real and personal property financing,
  • real estate sales and acquisitions,
  • employee compensation issues,
  • purchase and sale of business organizations,
  • structuring member or shareholder agreements,
  • succession and estate planning with respect to business enterprises,
  • international ventures,
  • individual and business income tax planning, tax-free reorganizations, tax-exempt organizations, tax controversy issues before the Internal Revenue Service and state agencies and other tax matters,
  • intellectual property,
  • joint ventures and strategic alliances,
  • e-commerce,
  • funding and negotiation of funding, raising capital and counseling of Boards of Directors,
  • mergers and acquisitions,
  • emerging and technology businesses,
  • shareholder planning and dispute resolution, and
  • estate and trust planning and administration. 

____________________________________________

Tom Dougherty and Dan Young discuss Closely Held Businesses from Lommen Abdo's Vimeo page.



Closely Held Resources:
We would be pleased to answer any questions you may have about the services of our Closely Held Business attorneys.  Any questions may be directed to:

In Minnesota:
Dan Young at 612-336-9343 or dyoung@lommen.com or Tom Dougherty at 612-336-9330 or tdougherty@lommen.com.