Shareholder agreements: the clauses you regret not having
While things go well, nobody rereads the agreement. The day a partner wants to leave, it becomes the most important document in the company.
The articles of association organise the company. The shareholder agreement organises the relationship between the partners. Three subjects are worth settling from the start.
A partner’s exit
What happens if one of you wants to sell, falls ill or dies? A pre-emption clause with a valuation formula avoids negotiating a price at the worst possible moment.
Deadlock
With two partners holding equal shares, a disagreement can paralyse the business. Provide a way out: referral to a third party, a casting vote on certain matters or a buy-out clause.
What each partner commits to
Time devoted to the company, non-competition, ownership of what you create: write it down. Misunderstandings rarely come from bad faith, and almost always from what was left unsaid.
What about confidentiality?
Unlike the articles, the agreement is not published. It is the place to record what you would rather not make public.
An agreement is drafted to measure: a template found online solves the problems of a company other than yours.