The focus of a shareholder agreement is usually on what each shareholder will bring to the relationship and the way the new entity will be managed and report its results.
Shareholder agreements are generally entered into by shareholders of private companies. To be done properly, they require careful consideration. As shareholder agreement lawyers, we consider that a well drafted shareholder agreement will address core issues such as:
There will usually be many more issues depending upon the nature of your business and the requirements of the shareholders.
Some more complex situations include:
If your company has more than one shareholder, other than your spouse, then absolutely.
People often think that if they know someone well that it isn’t necessary. Experience tells us that a shareholder agreement not only resolves disputes more quickly if they arise but, more importantly, it tends to prevent disputes and otherwise difficult discussions when circumstances change – and they almost invariably do. For example something as simple as one party wanting to sell its shares can be controversial without an agreement to refer back to.
A shareholder agreement also causes the parties begin with the end in mind and pre-empt issues that may not yet be relevant. It provokes sensible discussion and a clear path forward for the business. It also typically defines expectations and sets out decision making mechanisms. Shareholders’ Agreements are thus typically fairly individual, depending on the particular business.
Prior to starting the business is the ideal time to enter into a shareholder agreement. It means that everybody will decide on important matters before the deal is done. Often people come a short time into their business arrangement because a disagreement has arisen about a matter that could have been dealt with in a well drafted shareholder agreement.
That said, if you are running a business presently without a shareholder agreement, there is nothing to prevent you entering into an agreement, provided all the shareholders agree.
Just remember that the main purpose of a shareholder agreement is to prevent disillusion and disagreement later when circumstances inevitably change. So if you presently operate a business with more than one shareholder, when should you enter into a shareholder agreement? The sooner the better.
We are experienced in drafting shareholder agreements, giving special attention to individual circumstances so you will receive a competently drafted and well presented agreement.
We tailor every shareholder agreement we prepare for our clients.
Before we start drafting, we will ask you to consider a range of issues that can arise between shareholders with a view to them agreeing on how these issues will be dealt in the final document.
We then proceed to prepare a draft the shareholders agreement for you.
We also provide legal advice in relation to the alteration of shareholder agreements and shareholder disputes (including Shareholder Litigation).
Call us now on 1300 907 335 or fill out the contact form on this page and we will be right back to you.
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