When you’re starting a business with other people, it’s best practice to put a shareholders’ agreement in place. Your shareholders’ agreement is the key document that formalises and regulates the relationship between the individual shareholders in your company. It will clarify important issues such as:
- The current and future direction of your business
- Voting rights for each shareholder
- Payment of dividends
- How to conduct shareholder meetings
- What happens when you want to sell your shares
- How you’ll deal with disputes between the shareholders
What you will get from this service
A 60 minute consultation with your lawyer to align objectives. You’ll discuss:
- The names of the shareholders
- The percentage of each of their shareholdings.
- The objectives you want to achieve with the agreement
- Your specific questions about the agreement
- Your lawyer will run through the key information they need from you to begin drafting the agreement
What this service will enable you to do
You will have a formal, legally binding document that regulates the relationship between the shareholders. This provides you with:
- Protection for your shareholders and their investment in the business
- Specific protection for minority shareholders
- Specific protection for majority shareholders
- Clarity on each individual’s roles, rights, responsibilities and obligations as shareholders in the company.
- Control on the transfer of shares
- Regulation on the management of the company.
- The directors usually make decisions on management and strategy, but shareholders may want to provide their input or approval for certain decisions.
- Efficient recourse in the event of a disagreement.
- You’ll have a robust cause of action in breach of contract.
- Without a formal contract, you’ll spend more time and money trying to prove your case.
- Peace of mind that the shareholders are being treated fairly.