Signing Shareholders Agreement
When starting a business, one of the most important legal documents you need to consider is the shareholders agreement. This agreement is a contract between the shareholders who own a business, and it lays out the rules and guidelines for how the company will be run and managed. While it may not be a fun part of starting a business, signing a shareholders agreement is an important step in protecting your investments and ensuring that everyone is on the same page.
Here are some important points to keep in mind when it comes to signing a shareholders agreement.
1. What is a shareholders agreement?
A shareholders agreement is a legal contract between the shareholders of a company. It outlines the rights, responsibilities, and obligations of each shareholder, as well as the rules for how the company will be managed. This agreement is important because it helps to prevent conflicts and misunderstandings between shareholders.
2. Who needs a shareholders agreement?
Any company with multiple shareholders should have a shareholders agreement in place. This includes both small businesses and large corporations. The agreement helps to prevent misunderstandings and disputes between the shareholders and ensures that everyone is on the same page when it comes to running the company.
3. What should be included in a shareholders agreement?
A shareholders agreement should include several key provisions, including:
– Share ownership: This section outlines who owns what percentage of the company`s shares.
– Management structure: This section outlines how the company will be managed, including who will have decision-making power and what types of decisions will require shareholder approval.
– Dividend policy: This section outlines how dividends will be distributed to shareholders.
– Transfer of shares: This section outlines the procedures for buying and selling shares.
– Dispute resolution: This section outlines how disputes between shareholders will be resolved.
– Non-compete clauses: This section outlines any restrictions on shareholders working for or investing in competing companies.
4. How do you sign a shareholders agreement?
When it comes to signing a shareholders agreement, it`s important to work with a lawyer who has experience in this area. Your lawyer can help you draft the agreement and ensure that it covers all of the necessary provisions. Once the agreement is drafted, all shareholders will need to sign it to make it legally binding.
In conclusion, signing a shareholders agreement is an essential step in starting and running a business. It helps to prevent conflicts between shareholders and ensures that everyone is on the same page when it comes to managing the company. If you`re starting a business with multiple shareholders, be sure to work with a lawyer who has experience in drafting and negotiating shareholders agreements.