Connecticut Agreement Between Board Member and Close Corporation

• Category: Contracts - Board Member
• State: Multi-State
• Control #: US-1035BG
• Format: Word; Rich Text

Description

A corporation whose shares are held by a single shareholder or a closely-knit group of shareholders (such as a family) is known as a close corporation. The shares of stock are not traded publicly. Many of these types of corporations are small firms that in the past would have been operated as a sole proprietorship or partner¬ship, but have been incorporated in order to obtain the advantages of limited liability or a tax benefit or both. A disclaimer is a denial or renunciation of liability. A disclaimer may apply to a denial of responsibility for another's claim and/or may be a statement of non-responsibility. Connecticut Agreement Between Board Member and Close Corporation A Connecticut Agreement Between Board Member and Close Corporation is a legally binding contract that establishes the rights, obligations, and responsibilities of a board member in a close corporation operating in the state of Connecticut. This agreement serves as a guiding document to govern the relationship between the board member and the corporation, ensuring proper functioning and adherence to corporate governance principles. Key provisions that may be included in a Connecticut Agreement Between Board Member and Close Corporation are: 1. Duties and Responsibilities: The agreement outlines the specific duties and responsibilities of the board member, including their fiduciary duties to act in the best interests of the corporation and its shareholders. 2. Term and Compensation: It may specify the term of the board member's service, whether it is indefinite or for a fixed period, as well as details regarding compensation, including any retainer fees, equity stakes, or additional benefits the board member is entitled to. 3. Decision-Making Authority: The agreement may define the board member's decision-making authority, outlining whether they hold voting rights and any limitations on their powers. It may also establish procedures for board meetings, quorum requirements, and the frequency of meetings. 4. Confidentiality and Non-Disclosure: To protect the corporation's sensitive information, the agreement may include clauses regarding confidentiality and non-disclosure obligations on the part of the board member. 5. Conflict of Interest: To address potential conflicts of interest, the agreement may require the board member to disclose any conflicts and abstain from participating in discussions or decisions related to such conflicts. 6. Indemnification: The agreement may detail the extent to which the corporation will indemnify the board member against liabilities incurred in the course of their duties, subject to applicable state laws. 7. Termination: The circumstances under which the agreement may be terminated should be clearly defined. This may include resignation, removal for cause, or resignation due to incapacity. Types of Connecticut Agreement Between Board Member and Close Corporation: 1. Voting Agreement: This type of agreement focuses on the board member's voting rights and establishes a framework for decision-making within the close corporation. 2. Compensation Agreement: This agreement primarily addresses the board member's compensation structure, including details of salary, bonus, and equity-based incentives. 3. Non-Disclosure and Non-Compete Agreement: This type of agreement focuses on protecting the corporation's trade secrets and preventing board members from engaging in activities that might compete or pose a conflict of interest. 4. Indemnification Agreement: An indemnification agreement specifically outlines the terms under which the corporation will provide legal and financial protection to the board member. In summary, a Connecticut Agreement Between Board Member and Close Corporation is a crucial document that outlines the rights, responsibilities, and expectations of a board member within a close corporation operating in the state of Connecticut. By establishing clear guidelines, it helps maintain transparency, accountability, and proper corporate governance.

Connecticut Agreement Between Board Member and Close Corporation A Connecticut Agreement Between Board Member and Close Corporation is a legally binding contract that establishes the rights, obligations, and responsibilities of a board member in a close corporation operating in the state of Connecticut. This agreement serves as a guiding document to govern the relationship between the board member and the corporation, ensuring proper functioning and adherence to corporate governance principles. Key provisions that may be included in a Connecticut Agreement Between Board Member and Close Corporation are: 1. Duties and Responsibilities: The agreement outlines the specific duties and responsibilities of the board member, including their fiduciary duties to act in the best interests of the corporation and its shareholders. 2. Term and Compensation: It may specify the term of the board member's service, whether it is indefinite or for a fixed period, as well as details regarding compensation, including any retainer fees, equity stakes, or additional benefits the board member is entitled to. 3. Decision-Making Authority: The agreement may define the board member's decision-making authority, outlining whether they hold voting rights and any limitations on their powers. It may also establish procedures for board meetings, quorum requirements, and the frequency of meetings. 4. Confidentiality and Non-Disclosure: To protect the corporation's sensitive information, the agreement may include clauses regarding confidentiality and non-disclosure obligations on the part of the board member. 5. Conflict of Interest: To address potential conflicts of interest, the agreement may require the board member to disclose any conflicts and abstain from participating in discussions or decisions related to such conflicts. 6. Indemnification: The agreement may detail the extent to which the corporation will indemnify the board member against liabilities incurred in the course of their duties, subject to applicable state laws. 7. Termination: The circumstances under which the agreement may be terminated should be clearly defined. This may include resignation, removal for cause, or resignation due to incapacity. Types of Connecticut Agreement Between Board Member and Close Corporation: 1. Voting Agreement: This type of agreement focuses on the board member's voting rights and establishes a framework for decision-making within the close corporation. 2. Compensation Agreement: This agreement primarily addresses the board member's compensation structure, including details of salary, bonus, and equity-based incentives. 3. Non-Disclosure and Non-Compete Agreement: This type of agreement focuses on protecting the corporation's trade secrets and preventing board members from engaging in activities that might compete or pose a conflict of interest. 4. Indemnification Agreement: An indemnification agreement specifically outlines the terms under which the corporation will provide legal and financial protection to the board member. In summary, a Connecticut Agreement Between Board Member and Close Corporation is a crucial document that outlines the rights, responsibilities, and expectations of a board member within a close corporation operating in the state of Connecticut. By establishing clear guidelines, it helps maintain transparency, accountability, and proper corporate governance.