By Fredrick P. Niemann, Esq., a NJ LLC Attorney
It’s no surprise that more and more family-owned LLCs are being created in today’s society, as business-minded families are becoming more prevalent. With this has come a constant evaluation as to how these LLCs should be run. Proper business governance is key to ensuring family-owned LLCs pass beyond the first or second generation. Determining whether or not to place independent directors on the board can have a large impact on the future of your business in New Jersey.
For many family-owned businesses, the thought of an independent director or directors coming in is a foreign idea. After all, many family-controlled LLCs have restricted certificates, with no market for buying and selling these certificates. They are also generally small or medium-sized, although there are obviously exceptions. Unfortunately, bringing in independent directors could be just what your business needs, but you may be unaware of this. Often, family-owned LLCs have questions about this process that they need answered.
How do you know if you need a board of directors? When should one be created if you do? Once a board is established, what should the composition of the board be in terms of independent directors and family members? Why should independent directors take the seats of the family members who have worked so hard to make sure the business is profitable? What function does an independent director serve? How long should their term of office be for? How much should the LLC pay them? How does the LLC know who exactly should be right for the position? At Hanlon Niemann, we are here to answer all of your questions surrounding independent directors within your New Jersey LLC.
Contact me personally to discuss your NJ LLC matter. I am easy to talk to, very approachable and can offer you practical, legal ways to handle your concerns. You can reach me toll free at (855) 376-5291 or email me at fniemann@hnlawfirm.com/.