Many people on Staten Island do business with their family members or close friends.
Some invest in a corporation, partnership or other business organization together. Many of the most successful businesses in the New York area are family-owned.
However, family and friends do business in other ways as well. Often, one family member loans money to another, for example. In other cases, family members may buy or rent real estate or other property from each other.
Especially when family relations are good, one might think that they do not need a lawyer to prepare or review agreements like sales contracts, partnership agreements or loan documents. They may think that these documents are simply paperwork and the family can work out the details if there are any issues.
It is unfortunate, but the reality is that close family members and friends do have fallings out, often over business or financial matters. In these situations, a well-written contract is especially useful.
Furthermore, having well-written contracts clarifies expectations for everyone. They can even serve as a roadmap for a family as their dynamics change.
Having formal documents may be necessary to get legal benefits
Formal documents between family members may also be necessary to secure important legal benefits. On the flip side, they also can help family members avoid negative legal consequences as well.
To give just one of many examples, tax authorities will pay close attention to deals between family members. The authorities might worry that such business deals really are a way to avoid paying taxes one would otherwise have to pay.
Having a properly drafted agreement like a loan or sales contract can reassure authorities that a transaction between relatives is legitimate.
Even if among beloved family members or life-long friends, any significant business deal deserves a well-considered and properly drafted contract.