The History of My Townhome Part 3
The Legal Process
At 24 years old I had never created my own business. I wish I could say that I had at least set up a yard service in college or run a lemon aid stand but the truth is the creation of a business of any size was completely new to me. I was about to embark on the formation of a company that would have 3 partners, 1 storefront and a very big first client. Fortunately no one ever told me I couldn't do it so I went into this business venture being blissfully ignorant. Although I had proven my ability to sell I had yet to prove myself as a business owner. I would soon be engrossed in discussions with attorneys and accountants as I and my partners began to organize this new venture, My Townhome LLC.
As I have come to find out in the years that followed there is an intricacy to creating any business and the very structure of my company added additional levels of complexity. Our agreements had to satisfy the needs and wants of each of the 3 principles. The blissful ignorance that allowed me leave a secure sales position and go bullishly into making this new company would not prove to be an asset in the assembly of legal documents and organizational restrictions. I am certain that without my partners, had I started this company on my own I would have created these documents myself as a compilation of my own ideas of how the company should be formed and templates borrowed from the internet. I was very fortunate that I had business partners that understood the value of good representation and council and that this job was not left to me.
Having been part of much larger deals, my business partners were used to working with the top echelon of attorneys and accountants. I must admit I was awestruck when we would head to the upper floor of Charlotte's corporate center to meet in a grand conference room and hammer out the terms of the deal. It really was a fantastic moment when the elevator doors opened to the lobby of Moor & Van Allen. From my vantage point being invited to the table was an achievement in its own right. I was about to do business with an attorney that represented dozens of fortune 500 companies and they would be working for my company. It was surreal. Fortunately at the time I was not paying the bills because physical writing the check for those legal services may have tarnished some of my illusions of grandeur.
I had done my best to prepare but for the most part the meetings with our attorney were largely over my head. It turns out my BA in History and French was not lending much to a deep understanding of legal ease and articles of organization. The only deal point I discussed was the removal of a non-compete clause thanks to some sage advice from my father. I had read over the documents thoroughly and agreed with most all that was said. I was fortunate in this my first endeavor that my partners were trustworthy and fair. There we no attempts to make this a one sided deal or to bully me, a 24 year old with no experience. The general voting rights of the company where established with all 3 partners voting on issues that would dictate how the company was run. Our votes were equal and in matters of daily operations 2 votes were enough to move forward on most issues. On larger issues, like the sale of the company or making large purchases, all 3 of us would need to be in agreement. The idea of a unanimous vote to complete a company sale was a big deal point to me. My partners were in the business of creating, buying and selling companies. We were at the beginning of our relationship and I did not know if our views for the future of this company where the same. I believed at the time that the sale of the company for a profit would be a victory to the other partners while for me it would be a sobering sale that would take a piece of me with it. In the years to follow I was able to guarantee that the company would never be sold by buying all of the remaining interest. On January 2nd, 2000 my partners and I signed our Articles of Organization. After spending countless hours and a fair amount of expense deciding how the company should be organized it was time to get to the real work. The partnership was official. The bank account funded. It was time to figure out how to run a real estate company.
Written by T.J. Larsen, Founder My Townhome Realty
Tune in Next Month for Part 4 of this multi part series …Setting up Shop