Shareholder Agreements

A shareholders agreement is a contract negotiated by shareholders when, on incorporation, members wish to regulate vital aspects of the company’s management in the context of their ownership of securities. It governs the obligations, rights and liabilities of shareholders (or members), and is supplementary to a company’s constitution.

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Formalise your obligations and rights with a shareholder agreement

Shareholder agreements are highly beneficial because they ensure that the relationship between the company’s shareholders is agreed and documented. Typically, important terms incorporated in the agreement apply to the duties of the directors, the general operation of the business, board meetings and general meetings, as well as dividends, capital, loans, insurance and confidentiality.

A Shareholder Agreement will outline how critical business decisions will be made, and clauses can be customised to suit your company’s specific requirements. This includes a structure allowing the company to be valued independently in the event of a shareholder dispute, the management of intellectual property by shareholders, directors and key personnel, good and bad leaver provisions, the balance of power between majority and minority shareholders, pre-emptive rights, tag-along rights and drag-along rights.

At Lawbase, we understand that unexpected issues can arise when circumstances change in a company, and a failure to anticipate this can have serious consequences. We have extensive experience providing comprehensive and professional legal advice for small businesses across Australia, so if you’d like us to draft a customised shareholder agreement to protect your rights and the integrity of your enterprise, please talk to us today.

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