Why should you use a shareholder agreement?
Shareholder agreements regulate the relationship between shareholders to protect them from unwanted “overstepping” of shareholder’s rights by the business’s officers and directors. Shareholder agreements are especially important in closely held business. Closely held businesses are those in which a small number of individuals both own and/or operate the business. As it can be imagined, persons within a closely held business often wear many hats.
This level of multi-tasking creates problems that are usually dealt with through separation of control and ownership within a corporation. However, such separation does not exist in a closely held business. With virtually all activities being generally fulfilled by the owners, it is relatively easy for issues to arise regarding how much responsibility each owner has, or even minority shareholders being mistreated within a business by a majority shareholder(s).
Benefits of Shareholder’s Agreement
- Generally, provide clarity regarding shareholders and their rights.
- Provides guidance as to what roles, if any, shareholders will play.
- Can potentially avoid litigation by listing how issues are resolved such as selling of shares.
How long does it take to create a custom Shareholders’ Agreement?
Approximately 1-2 business days*
*Depending on Specifications
Why SG Law Group to create your custom Shareholders’ Agreement?
This is where Shareholder agreements come into play. Shareholder agreements delineate responsibilities of each owner. Shareholder agreements can also provide mechanisms to protect the corporation from death of a shareholder, or when shareholders seek to sell off their stake in the company. If you think your business could use a shareholder’s agreement to make sure the minority interest is protected contact SG Law Group.
Hire an affordable, professional Attorney to properly draft your Shareholder’s Agreement Today!