Glossary · Reading the business
Governance model
In short
The framework of rules, practices, and processes by which a business is directed and controlled. This impacts decision-making, accountability, and the overall management structure you'll inherit.
What it means in a deal
Understand the existing governance model during due diligence, especially if acquiring a larger business or one with multiple owners. This includes bylaws, operating agreements, and decision-making authority. For a small business, it often means understanding how the current owner makes decisions and how responsibilities are delegated. You'll need to establish your own model post-acquisition.
Related terms
Common questions about Governance model
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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