To save some costs we have decided to write the shareholders agreement ourselves. Are there any specific things that we must address in it?
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Answer by LegalEagle™ staff, New Farm 4005 QLD
- A shareholders agreement is a commercial agreement between the shareholders and the company. It is advisable to get legal advice or hire a lawyer to draft a shareholders agreement specific to your situation.
- In addition to ordinary contractual terms a shareholders agreement may set out specific agreed terms and conditions such as the manner in which any shareholder may dispose of shares.
- The matters that might be addressed in a shareholders agreement include:
- definitions and interpretation;
- parties;
- protection of shareholders;
- directors duties such as how they are appointed and quorum of the board;
- business plans for the company;
- shareholders’ involvement with management;
- policies such as dividend distribution;
- when unanimous, majority shareholder or director resolutions are required;
- how an unanimous resolution process would work;
- disposal of shares specifically:
- proposed share transfers;
- pre-emption;
- tag along rights; and
- new shareholders obligations.
- forced share transfers;
- dispute resolution for deadlocks;
- GST and other tax matters;
- the term of the agreement;
- confirming that parties are not partners; and
- standard contract terms such as:
- severability;
- entire understanding;
- variation;
- waiver;
- costs;
- notices; and
- governing law and jurisdiction.