Do I need a Shareholders Agreement?
Absolutely and it is a best practice to prepare a Shareholders Agreement as soon as you form a Company. Circumstance change as the Company operates and Shareholders may forget the terms on which the Company was formed.
Why is it important?
A Shareholders Agreement is a legal binding document between the shareholders of the Company. In my opinion these are the basics things where a Shareholders Agreement can be very useful:
• It minimises business disputes between owners and provides for dispute resolution;
• makes it clear how decisions are made;
• makes it clear who contributes if the business needs additional money down the track;
• Sets out procedures if a shareholder decides to sell their shares;
• Sets out who can sell and buy and at what price.
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