Mackinac Bridge

Business Planning and the Pandemic

Where Do You Start?

The Coronavirus (COVID-19) outbreak has disrupted business operations for nearly everyone.  Business owners face a variety of difficult issues, including managing a workforce under ever-changing conditions, dealing with contractual breaches and non-payment issues, complying with new governmental guidelines and requirements, and handling day-to-day operational issues to ensure the business survives these uncertain times.  At Rossman Saxe, we are here to help make sure that your business is properly protected, to help you navigate the complexities of running your business, and to aggressively pursue your business interests in the event of a dispute.


In Michigan, the only document required to form your business is the articles of organization for limited liability companies or the articles of incorporation for corporations.  Unfortunately, if that singular document is the extent of your corporate governance, many questions will be left unanswered if your business is unable to operate as usual due to the sickness or death of a key member of your organization.  It is, therefore, essential that your business has proper corporate governance documents in place beyond the basic, state-mandated organizational document to ensure that your partner and your family are not left with unanswered questions if faced with the task of carrying on in your absence.    


Properly documented corporate governance is important to ensure that the business is protected both in the event of litigation, as well as in the event of the unexpected death or infirmity of a partner.  Every business should have an operating agreement/shareholder agreement and strong consideration should be given for business owned by more than one individual to the implementation of a buy-sell agreement.  Further, if your business is a corporation, annual meetings should be held between the shareholders and those meetings should be documented in the form of corporate minutes which should then be incorporated in the company's corporate minute book.  

An operating agreement or shareholder agreement, depending on corporate structure, should be utilized to dictate various operational components of your business, including management, membership, capital contributions, distributionstaxation, mergers, dissolutions, securities, record-keeping, and accounting of the company.  This document becomes increasingly important in the event of a dispute between the business and a third-party because it works to ensure the separation between the assets of the closely held business and the personally held assets of one of the business’s owners.  

A buy-sell agreement is an agreement between the owners of the closely held business which outlines the terms for the disposal of a member/shareholder’s interest in the company in the event of a sale.  The terms of the sale are addressed, including considerations such as when an owner can sell their interest, who can buy the owner's interest, and what price will be paid.  Typically, these agreements come into play when an owner retires, files for bankruptcy, becomes disabled, gets divorced, or passes away.  The importance of having an effective buy-sell agreement in place cannot be understated in light of the COVID-19 pandemic.  


The government mandates regarding business operations in light of the COVID-19 pandemic are ever evolving.  Owners are faced with assigning employees as essential simply to allow that employee to travel to the office and meet with a coworker.  They further are met with the obligation to provide variations of paid leave to employees who are infected or impacted closely by COVID-19.  What notices should be posted and disseminated to your staff?  Should you remain open?  What is your business exposure? 

Regardless of industry, many business owners find themselves combing through their contracts to assess their exposure if they are unable to perform their obligations or if their vendors fail to perform as a result of the pandemic.  Ensuring that your current contracts contain the necessary language to insulate your business’s interest is crucial.  

Our business attorneys are standing by to answer your questions and are constantly monitoring the ever-evolving legal landscape to ensure that you are provided with the most up-to-date guidance for your business. 


Many businesses are faced with the grim reality that performance on contracts may not be possible if the business fully complies with the government mandates issued to prevent the spread of COVID-19.  If a dispute arises between your business and a third party, regardless of the nature, our experienced business litigators stand ready to act as zealous advocates on behalf of your business.  


At Rossman P.C.  we are focused on guiding our clients through this difficult time and are here to answer all of your business questions. We offer phone consultations as well as video conferencing to ensure we are practicing social distancing.  It is not too late to begin these discussions and implement a business planning strategy that works for you