A shareholder agreement is a legal document that outlines the rights and responsibilities of the shareholders in a corporation, including how the company is run, how profits are distributed, and what happens if a shareholder wants to sell their shares.
The business lawyers at Goldstein and Grubner have experience drafting, revising, and negotiating shareholder agreements to protect your interests and ensure the smooth operation of your company. Below is a brief summary of some of the key terms and concepts related to shareholder agreements.
Ownership Structure
A shareholder agreement should clearly outline the ownership structure of the corporation, including who owns what percentage of shares and how those shares can be transferred or sold.
Decision-Making Authority
The agreement should also address decision-making authority within the company, including how major decisions will be made (e.g., by unanimous vote or majority vote) and who has voting rights.
Management Roles
The roles and responsibilities of each shareholder should be defined in the agreement to avoid confusion or conflicts over management duties.
Shareholder Obligations
Shareholders may have certain obligations under the agreement, such as providing capital contributions or refraining from competing with the company.
Dispute Resolution Mechanisms
In case disputes arise between shareholders, it is important to have clear dispute resolution mechanisms outlined in the agreement to avoid costly litigation.
Exit Strategies
Finally, a well-drafted shareholder agreement should address exit strategies for shareholders who wish to sell their shares or leave the company for other reasons.
At our law firm, we understand that every business is unique and requires tailored solutions when it comes to creating effective shareholder agreements. Our experienced lawyers can help you navigate these complex issues and create an agreement that meets your specific needs while protecting your interests as a business owner.
Contact us today to learn more about how we can assist you with creating an effective shareholder agreement for your business.
Key Terms and Concepts
When drafting or reviewing a shareholder agreement, it is important to understand
some of the key terms and concepts that may be included. Here are some of the most important:
Shareholder Voting
Shareholders have the right to vote on important company decisions, such as the election of board members, major business transactions, and changes to the company’s bylaws. A shareholder agreement may include provisions that outline how voting rights are allocated, how votes are cast, and how disputes are resolved.
Shareholder Equity
Shareholders own a percentage of the company’s equity, which entitles them to a portion of the profits and assets. A shareholder agreement may specify how equity is distributed and what happens if a shareholder wants to sell their shares.
Board of Directors
The board of directors is responsible for overseeing the company’s operations and making strategic decisions. A shareholder agreement may outline the composition of the board, how board members are elected or appointed, and how decisions are made.
Transfer of Shares
Shareholders may want to sell their shares at some point, and a shareholder agreement can provide guidelines for how this process will work. This may include restrictions on who can buy shares, how much they can be sold for, and how the sale will be executed.
At our law firm, we offer a full range of services related to shareholder agreements, including drafting, revising, and negotiating. Our experienced team of lawyers has helped businesses of all sizes and industries create effective shareholder agreements that protect their interests and ensure the smooth operation of their company.
