Partners & Shareholders
Every business, with more than one owner, should have a shareholder agreement. This goes way beyond the standard Constitution, which is rarely helpful.
Experience dictates that businesses with thought out partner / shareholder agreements survive longer.
“Straight to the point, honest and informative. Experienced advice regarding matters dealing with … partnerships.”
No one looks at the Constitution unless someone wants to enter or exit the business, or when a fight is brewing.
It’s the rules of how to get in, get our, fight, or what happens if you compete, retire, go mad or die that you find in a shareholders agreement. They deal with all the disaster scenarios in advance and save a load of stress if and when disaster strikes.
Checklist for business agreements (internal)
The following handy guide, is a starter for setting up or improving your internal business agreement with business partners and shareholders:
- Structure – Is a partnership, company or trust appropriate;
- Parties – Individuals, companies or trusts;
- Guarantee – By individuals of obligations of a partner which is a company or a trust;
- Date of commencement – New or continuing partnership;
- Scope of business – How is the business to be described;
- Business name;
- Premises – Leased or owned;
- Duration of business;
- Assets – Partnership or individual assets;
- Profits – How divided;
- Directors fees and shareholder dividends;
- Incoming partners / shareholders – Business valuation;
- Payments to outgoing directors and shareholders;
- Retirement – When and how;
- Death – Consequences;
- Expulsion – In what circumstances can a partner be expelled;
- Sickness – What happens if you are sick;
- Restrictive covenants;
- Management issues – Internal controls; and
- Dispute resolution.