This article explains what a shareholder pact is and why it is important. Second, he explains why hiring a lawyer is the best decision in the development of a shareholder contract and what deficits are to do it yourself. If there are different shareholders with competing interests, a lawyer can help identify, negotiate and implement solutions. Because they deal with such agreements on a daily basis, they can help you identify and solve problems much more effectively than usual. Being a shareholder does not even give the right to be a director, and that is usually one of the provisions of a shareholder contract. Most agreements go even further by providing a list of management decisions that require the agreement of all (or a certain percentage) of directors. The circumstances are different, but the typical provisions deal with issues that are not part of the usual activity, such as changing the nature of the transaction, entering into unusual contracts or contracts to which a director is personally interested, the extension of the company`s overdraft (which have often personally guaranteed all directors), borrowing on agreed limits , hiring or firing employees in unusual circumstances, or opening or defending legal proceedings. This is, in many cases, our overall burden. If complex additional concepts need to be developed, there may be additional costs, but we would always discuss the actual costs before they continue, and it is very unlikely that the amount will exceed $600, plus VAT. Normally, it is not necessary for everyone to seek their own legal advice. Instead, your lawyer works with all of you and helps you get an agreement that lives up to everyone.
Most of the value of a well-prepared shareholder pact does not appear in the final print version. On the contrary, much of the value lies in the journey that takes you there. Again, there is probably nothing wrong with the document itself. It is only by definition that a draft shareholders` pact has not been prepared for you or your circumstances – meaning that it may be manifestly inappropriate or insufficient. That is why you are offered the document with so many disclaimers. If you try to shorten this process, either by using a model agreement or relying too much on accountants or lawyers to make decisions for you, your agreement may not adequately meet your requirements. If this happens, the exercise at the end can be a waste of time and costs (no matter what you spend). If you are considering starting a business or if you already have a company in which you are a multiple owner, you should have a shareholder pact or, at the very least, consider. This contract between you and your business partners protects the company from the most pessimistic scenarios. And when seeking the help of a legal expert, make sure that potential legal issues are identified, that your shareholders` pact is sound and that everyone is protected.
A shareholders` pact is a contract between the shareholders of a company in which they agree on how the company is managed. They all agree that they will use their voting rights in the company to ensure that the terms of the agreement will be respected as long as they are all shareholders. If your business is more about yourself, it is essential to get a shareholder contract. Whether you`re creating a business with a family member, a best friend or even your big business, you don`t know what can happen if the business gets mad. With a shareholder pact, you and your trading partners can be prepared for the worst and get predictable results for future events. Even if your business is doing well, it`s important to think about the most pessimistic scenarios when developing a shareholder contract. It is much easier to design this contract when the company is doing well than to try to break a deal and negotiate with shareholders as soon as things get out of hand.