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Shareholder Agreement
When shareholders in a business want to establish rules about how their company is run, a Shareholder Agreement is a smart way to get everything in writing. Avoid potential disputes by defining the... Read More
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Making a Shareholder Agreement
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What is a Shareholder Agreement?
When shareholders in a business want to establish rules about how their company is run, a Shareholder Agreement is a smart way to get everything in writing. Avoid potential disputes by defining the roles of shareholders and what corporate actions require the consent of the shareholders.
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What should a Shareholder Agreement include?
A Shareholder Agreement should:
- Name the shareholders
- Define the roles and responsibilities of the shareholders
- Detail the limitations on the sale of stock
- Specify what earnings must be passed to the shareholders as dividends
- Describe the conditions that must be met to dissolve the corporation
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Why do you need a Shareholder Agreement?
A Shareholder Agreement will help avoid potential disputes and ensure the success of your business by making sure all shareholder rights and investments are protected.
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Do all shareholders need to sign a Shareholder Agreement?
Yes, all shareholders need to sign a Shareholder Agreement.
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What happens if there is no Shareholder Agreement?
A Shareholder Agreement ensures smooth business operations by detailing the rights and obligations of the shareholders, how to run the business, how shares will be dealt with, and how disputes will be resolved. Shareholders can be deadlocked and confusion will ensue without a Shareholder Agreement.
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