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Shareholders' Agreements

Shareholders' Agreements

Why do I need a Shareholders' Agreement?

If have a business or are thinking of starting one, and there are two or more shareholders involved, it is recommended you get a Shareholders' Agreement prepared as it will be the document that will be used should things go wrong or new investors get involved.

Although not legally mandatory, it is the document that will stipulate what should happen if conflict arises, one party wants to sell or financial difficulties arise.  It might seem like a good idea to go into business with your friend, but when hard decisions have to be made, this is the time when the relationships get tested.  

Not unlike a marriage or partnership, couples often enter into a 'pre-nup' agreement.  If you think about a Shareholders' Agreement like a business pre-nup, it is easy to understand how this document could help you in times of stress, change or separation.

What should be in a Shareholders' Agreement?

Just as no two businesses are the same, nor should any two Shareholders' Agreements.  What is in a Shareholders' Agreement depends on not only where you get it from, but what the circumstances are within your business, how many shareholders are involved and other unique factors that should be addressed during the discovery phase of a legal advisor preparing this.  To understand the critical need for a business to consider with this agreement, watch this short video where we discuss some fundamental rules to consider when preparing or reviewing your Shareholders' Agreement.

ABLA has prepared this comprehensive Guide to Shareholders' Agreements that walks you through the key elements to consider with this document. 

While ABLA no longer has a corporate & commercial practice dealing with SHareholders' Agreements we hope the above information is useful. Should you require assistance with any aspect of workplace and employment law please contact our dedicated team on1300 565 846 or email info@ablawyers.com.au. 

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