Now that you’ve sorted through the barriers that are keeping you from making governing decisions, it’s time to record final agreements. We are proud of you for making it to this point with your governance document. You’re in the home stretch now!
At this point you may feel quite organized. You’ve got all of your meeting notes and decisions recorded in a notebook or digital files, and you and your business partner(s) understand how you want the business to be governed moving forward. Alternatively, you may feel a bit scattered. You’ve had many conversations and taken down a lot of notes, but few concrete decisions have been made.
In either case, you are still on track. In this step you will have the opportunity to either (a) record your final decisions in one place or, for issues you still need to come to agreement on, you can (b) work on making final decisions now.
Try this: One document to rule them all (Freely timed or ~1.5-hour exercise)
Call a meeting with all business owners to record your final governing decisions into a single document. Whether you’ve been working on paper or in a word processor, it’s time to create a single digital document to log your decisions. Use Microsoft Word, Pages, Google Documents, or another word processor to create your decision log. Once you generate your decision log, print off a copy for each business partner to sign AFTER working through Step 7: Attorney Review.
Details to include in your decision log:
· Time and date: Record the time and date somewhere easily visible, ideally at the top of the page.
· Business name: Name the business that this document will be governing.
· Attendance: Record the business partners present at the time of creation.
· A 3-column table: Set up your decision log by creating a table that is 3 columns x 18 rows, with the column titles: Governing Issues, Decision, and Reasoning. See template below for an example.
· 17 Governing Questions: Write the governing questions into each row under the Governing Issue heading.
· Final decisions: In the Decision column, record the decision for each governing issue. This will serve as the governing plan until amended. Do you still need support for drafting decisions? Reference the LLC Operating Agreement Formation Checklist for detailed guidance on each question. If you have a general partnership, refer to the “Preparing a Partnership Agreement for a General Partnership” section of the Sole Proprietorship and General Partnership Fundamentals for further guidance. If you have a corporation, refer to the C Corporation Sample Bylaws for corporation specific terms.
· Supporting details: In the Reasoning column, record the information that supports each decision, such as your logic, research, advisor notes, other reports or documents you put together. If you, your partner(s), or future business partners second-guess a decision in the future, the reasoning can reinforce confidence in the original course of action or provide a point from which to pivot.
· Signature lines: Include signature lines for each business partner at the bottom of the decision log. Be sure to add a line for the date and do not sign until after you work through Step 7: Attorney review.
