Also referred to as a ‘Stockholder Agreement’, this is a document that showcases an agreement that has been made amongst the shareholders of the company. This agreement also states how the company will and should be operated while also outlining the rights and obligations of all shareholders. Additionally, a shareholder’s agreement will also include any information relating to the management of the company in question, along with any privileges and protection of shareholders being listed too.
How Can We Help You?
• Reduced Disputes
By having the terms and conditions of the agreement laid out clearly and legibly, any potential for grey areas becomes reduced significantly. This relieves the company and shareholders of any unnecessary pressure, all by simply ensuring that areas of potential conflict are regulated.
• Clear Guidelines Regarding Shares being Sold
Whenever shares are sold, it can cause a lot of wariness amongst existing shareholders. With clear guidelines in place, it can provide relief by simply knowing who the new shareholder(s) will be, as well as describing their role within the company.
• Rights and Responsibilities are Stipulated
Within a professionally written shareholders agreement, it should be stated exactly what rights and responsibilities each shareholder has. With this in place, each party is able to know what is expected of them, as well as what options are available whenever challenging times crop up.
• The Termination of Shareholders or Directors is Regulated
Whenever a shareholder or director leaves the company, for one reason or another, it can be unnerving for any company. Having this form of the situation be accounted for within a shareholder agreement, prevents anyone from being terminated unfairly or unlawfully, which can lead to lawsuits being filed against the company. This is why shareholder agreements should also remain compliant with the Companies Act and Labour Relations Act.
To write a bulletproof shareholder agreement, Hills Business Solutions first aims to understand the ins and outs of your business. It is because of this that each agreement may differ slightly depending on your business.
With this information, we begin to cover the following points in detail, including but not limited to:
- Expenses and Income
- Shareholder Economics
- Board of Directors
- Roles and Responsibilities
- Selling of Shares and Business
- Resolution of Disputes
- The Issuing of New Shares
- Decision Making