What’s in a name? Sometimes plenty, which is one reason why the House of Representatives recently passed H.R. 2187, the Fair Investment Opportunities for Professional Experts Act. The move follows years of discussion regarding whether the existing definition of “accredited investor” should be amended. As passed by the House, the bill retains the name but broadens the existing definition of “accredited investor” to include two additional categories of individuals able to meet the definition notwithstanding their net worth or income level.

Operational excellence for owners of small or closely-held businesses may involve certain challenges that are less applicable in larger entities. For example, the temptation may exist to operate less formally, with less accountability and oversight due to pre-existing or familial relationships. Agreements, if written, may be sparsely worded. Documentation of key business decisions and transactions may be lacking. We saw this type of sloppy governance earlier this year in Robl Construction vs. Homoly, No. 13-3607 (8th Cir. 2015). Robl involved a two-member LLC with poorly drafted governing documents and inadequately maintained records that have cost the parties a significant amount of time and money in court.