Any small business owner will tell you that growing a business is not easy. This is especially true when dealing with a felony charge. The consequences of a business owner being charged with a felony may vary depending on the business and the circumstances, but here is a general overview.
If your small business requires a license—for example, a doctor, therapist, attorney, or similar business overseen by the government—you may be required to report the incident to the board that oversees your business. Even if you don’t fall into one of those categories, your business will face potential public relations problems because of the charge showing up on the internet, or perhaps in the media. Your business may also suffer due to diverted focus towards criminal proceedings over business operations.
If you are convicted of a felony, you will likely be looking at prison time. It’s hard to run a business while in prison. Thus, you will need to hire someone to run the business. In general, you can continue to run the business, you merely need to hire an employee, such as a president or CEO, who can handle the daily operations of the business in your absence.
Since you are unable to attend board meetings, you will also need to appoint a member of the board of directors to serve in your place. If your business is organized as an LLC, you would appoint someone to serve in your place on the LLC’s board of governors. Either way, this board oversees the president, and the large decisions of the company. Since you would be unavailable to attend board meetings, a spouse, close friend, attorney, or CPA may be a good choice to represent you on the board. This board will provide a check and balance on the CEO or president who runs the company in your absence.
The consequences of incarceration are somewhat obvious: You can’t run the business, you will be distracted from the business, and your license to practice in certain professions may be jeopardized. But, in general, the business can go on as long as you deal with these issues. A felony conviction does not mean the end of your business, but it creates some new challenges for the business owner to overcome. In fact, this forced time away from the business can sometimes produce positive results, including allowing the business to operate without its owner, giving the owner a fresh perspective on growing the business when he or she returns.
Author Bio:
Minnesota attorney Aaron Hall is an experienced lawyer in Minneapolis & St. Paul who represents clients in a number of legal areas including Corporate & Business, Litigation and Intellectual Property.
