Legal Resolutions for Family Businesses: Start 2026 Right

Published: January 2, 2026 | Category: Business Law

As we welcome 2026, business owners across Chicago are setting goals for growth, profitability, and operational excellence. But while many businesses focus on sales targets and marketing strategies, they often overlook a critical component of long-term success: legal health.

For family-owned businesses, legal resolutions aren’t just about compliance—they’re about protecting your legacy, preventing disputes, and positioning your company for sustainable growth. Here are five legal resolutions every family business should consider for 2026.

1. Update Your Operating Agreement or Partnership Agreement

When was the last time you reviewed your company’s governing documents? If it’s been more than a year (or if you’ve never had formal documents), 2026 is the year to fix that.

Why it matters:

• Business circumstances change—revenue, ownership percentages, roles, and responsibilities evolve
• Outdated agreements can lead to disputes when decisions need to be made
• Clear governance structures prevent family conflicts from derailing business operations
• Updated buy-sell provisions protect everyone if a partner wants to exit or passes away

Action step: Schedule a legal checkup to review your operating agreement, partnership agreement, or corporate bylaws. Ensure they reflect your current business structure, ownership, and succession plans.

2. Conduct a Contract Audit

How many active contracts does your business have? Do you know what you’re obligated to do—and what others are obligated to do for you?

Many business owners sign contracts and file them away, only to discover problematic terms when a dispute arises. A contract audit helps you:

• Identify unfavorable terms that can be renegotiated
• Spot missing contracts (like vendor agreements or employment contracts)
• Ensure compliance with contractual obligations
• Find opportunities to consolidate or terminate unnecessary agreements
• Verify that indemnification and liability clauses protect your interests

Action step: Gather all active contracts (vendor agreements, customer contracts, leases, employment agreements) and have an attorney review them for risks and opportunities.

3. Implement Proper Corporate Governance

If you’re operating as an LLC or corporation but haven’t held formal meetings, maintained minutes, or followed corporate formalities, you’re putting your limited liability protection at risk.

Courts can “pierce the corporate veil” and hold owners personally liable for business debts if you fail to maintain separation between personal and business affairs.

Key governance practices for 2026:

• Hold and document annual shareholder/member meetings
• Maintain meeting minutes and resolutions
• Keep business and personal finances completely separate
• File annual reports with the Illinois Secretary of State
• Update registered agent information if needed
• Review and renew business licenses and permits

Action step: Create a corporate governance calendar for 2026 with reminders for annual meetings, report filings, and documentation requirements.

4. Plan for Succession (Even If You’re Not Ready to Retire)

One of the biggest challenges facing family-owned businesses is succession planning. Who will take over when you’re ready to step back? What happens if something unexpected occurs?

Succession planning isn’t just for business owners approaching retirement—it’s for anyone who wants to ensure business continuity.

Key succession planning steps:

• Identify potential successors (family members, key employees, or outside buyers)
• Document institutional knowledge and key processes
• Create a training and development plan for successors
• Update estate planning documents to align with business succession
• Consider life insurance to fund buy-sell agreements
• Establish clear timelines and transition milestones

Action step: Start the conversation with family members and key stakeholders about the future of the business. Work with an attorney to create a formal succession plan.

5. Review Your Insurance and Risk Management Strategy

Are you adequately protected against the legal and financial risks your business faces in 2026?

Business risks evolve. New regulations, emerging technologies, and changing business models create exposures that may not be covered by your existing insurance policies.

Areas to review:

• General Liability Insurance: Covers bodily injury and property damage claims
• Professional Liability (E&O): Protects against errors, omissions, and negligence claims
• Cyber Liability Insurance: Covers data breaches and cybersecurity incidents
• Directors & Officers (D&O) Insurance: Protects leadership from personal liability
• Employment Practices Liability (EPLI): Covers wrongful termination and discrimination claims
• Business Interruption Insurance: Replaces income if operations are disrupted

Action step: Schedule an insurance review with your broker and attorney to identify coverage gaps and ensure your policies align with your current business operations.

Bonus Resolution: Establish a Relationship with a Fractional General Counsel

One of the best legal resolutions you can make is to stop treating legal counsel as an expense and start treating it as an investment.

Many family-owned businesses operate reactively—calling an attorney only when a problem arises. But by then, the issue is often expensive and time-consuming to resolve.

A fractional general counsel serves as your part-time in-house attorney, providing proactive legal guidance at a fraction of the cost of a full-time hire. Benefits include:

• Ongoing legal advice without the surprise bills
• Strategic guidance on major business decisions
• Contract review and negotiation support
• Early identification and mitigation of legal risks
• Priority access when urgent matters arise

Action step: Schedule a consultation to discuss how fractional general counsel services can support your business in 2026.

Make 2026 Your Best Year Yet

Legal resolutions may not be as exciting as revenue goals or expansion plans, but they’re just as important. Taking proactive steps now can prevent costly disputes, protect your assets, and position your family business for long-term success.

At Burhanuddin Law, we help Chicago-area family businesses navigate complex legal issues with clarity and confidence. Whether you need help updating your operating agreement, conducting a contract audit, or planning for succession, we’re here to support you.

Ready to start 2026 with a solid legal foundation? Call (312) 216-5174 or email [email protected] to schedule your consultation.

Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your business situation, please consult with an attorney.

Ongoing Legal Support

Consider fractional general counsel services to keep your business legally protected year-round. Download our Fractional GC Guide.