This course examines the distinctive characteristics of family businesses, with a particular focus on their governance needs. To be effective, a legal advisor must appreciate the overlap of family law and business law principles, and we will explore important areas of intersection, including (1) how business succession relates to estate planning, and (2) the potentially adverse business implications of marital divorce. We will also discuss ethical issues involving multiple representation that often arise in the context of family businesses. Finally, the course will take up conceptual and normative questions regarding the definition of family business and the extent to which family values influence business priorities.

This course is a semester-long transaction simulation. The simulated transaction is the formation and initial financing of a privately-held company. It introduces students to the various legal and business considerations involved in forming and operating an early-stage business. The course will examine the deal cycle of a start-up company and expose students to the principal issues involved in counseling entrepreneurs as to their emerging businesses, including choice of entity and entity formation, equity compensation for founders and employees, intellectual property, protection of company assets, capital raising through preferred stock financing, and negotiation of financing-related contracts based on industry-standard models.

At least one out of every three U.S. businesses are family owned. They are most often privately owned but there are also many publicly traded companies that are family controlled. Family businesses are distinctive because they require participants and their legal counsel to reconcile family roles and expectations with business roles and expectations and to address issues of control and governance for the business and the family. Depending on the instructor, topics covered may include the following: choice of business entity; the appropriate use of buy-sell agreements, voting trusts and other dispute resolution mechanisms; employment best practices for family and non-family members; the impact of business ownership on estate and financial planning for the family, including tax considerations; financing and capital structures unique to family enterprises; catalysts for the sale of the family business; the role of the family office in managing inter-generational wealth; ethical issues faced by lawyers in family-business representation; fiduciary responsibilities of board members and controlling shareholders; and preparing a family business for sale or intergenerational transfer.

This course will provide students with practical and substantive knowledge and experience in transactional law using a small business nonprofit or small business for-profit organization model. It will be multidisciplinary and provide students a broad theoretical and practical experience with measurable outcomes and skills, including problem solving, project management, leadership, and teamwork. Students will act as counsel for a group interested in forming either a nonprofit 501(c)(3) organization or a for-profit entity that will own and operate a business. As counsel for the organization, students’ responsibilities will include interviewing a client; reviewing a Retainer Agreement; preparing Articles of Incorporation; preparing Bylaws; preparing IRC Form 1023 (Application for Exemption) or LLC or other business documents; providing Board of Director education and advice at simulated board meetings; and preparing Contracts, Lease Agreements, and/or Sponsorship Agreements. Students may also advise the client and draft documents related to copyright issues, potential mergers, and partnership agreements.

For students interested in the representation of small and family-owned businesses. Students have the opportunity to gain insight into the distinctive characteristics of small and family-owned businesses, explore possible career paths, and continue to develop their professional identity, while providing assistance to organizations and agencies that advise low-income and under-represented South Carolinians who are seeking to start, sustain, and scale a business venture. Students will gain a deeper appreciation of the factors that may affect decisions concerning choice of entity form, capital structure, allocation of financial and control rights, protection of intellectual property, and regulatory compliance. The majority of the course work will be done outside of class; however, students will be actively supervised by an attorney supervisor and will attend a companion class taught by an instructor with experience in this area to reflect upon their fieldwork experience. Students will work a minimum of 8 hours per week for 13 weeks at their field placement. The work will consist of substantive legal work including legal research, drafting memoranda and court documents, and the observation of related legal proceedings. Students will also attend the companion class every other week (7 total classes) for 1 hour with an instructor and other students with similar fieldwork experiences to reflect upon their experience and to explore family and business law topics such as identifying the client, succession planning, best practices to anticipate and resolve disputes, and the overlap of family and business value systems. Fieldwork placements may include:

• SC Small Business Development Center
• SCORE
• SC Department of Commerce
• SC Council on Competitiveness