A shareholders’ agreement governs the relationship between the owners or shareholders of the company. The agreement deals with the funding, management, structure and direction of the company. In it, the shareholders agree on how they will deal with any issues or disputes which may arise during the life of the company. For this reason, it is important for shareholders to consider these issues early while they are in agreement with each other.
There are three main reasons for having an experienced lawyer draft a shareholders’ agreement for your Geelong or Bellarine Peninsula business.
1/ Business decision frameworks
By far, the greatest advantage of having a shareholder’s agreement is the certainty it provides to the running of your business. It will outline how decisions are made and who can make them, how shares are transferred or dealt with and how any disputes will be resolved.
2/ Dispute resolution strategies
You cannot underestimate how a dispute amongst the owners can cripple a business. Procedures in the shareholder’s agreement are designed to give the parties the best chance of resolving disputes and dealing with contentious issues such as the sale of shares or bankruptcy.
3/ Insolvency or death of business owners’ procedures
Shareholders’ agreements can also deal with the death and insolvency of any of the owners in a way that is fair and certain for all parties. In the event of a death, the shares will go to the estate of the deceased and be dealt with by the family of the deceased business owner. This will have unintended effects on the business as one of its owners will not be familiar or have the necessary expertise or experience to run the business.
Valuable, accurate legal advice
Similar to shareholder agreements, every business is unique. At Whyte, Just & Moore, we offer tailored shareholder agreements that suit your business and your shareholder’s needs. If you are starting a business in Geelong or adding shareholders to your current business, a shareholder agreement offers clear direction for all parties involved.
Pave a smooth path for your business with a shareholder agreement from the experienced Business Law team at WJM. Providing legal advice for businesses in Geelong and along the Bellarine Peninsula and Surf Coast for over 140 years, WJM’s legal expertise will ensure your shareholders’ agreement is tailored to your business.