Most businesses with more than one owner start with goodwill and a shared plan. A shareholder agreement records what happens when circumstances change, before anyone has a reason to disagree.
What it usually covers
- How decisions are made, and which require everyone’s agreement.
- What happens if an owner wants to leave, retires or becomes unable to work.
- How shares are valued and offered to the remaining owners.
- How disputes between owners will be resolved.
Why timing matters
It is far easier to agree a fair process while everyone is on good terms. Once a disagreement has started, every clause becomes a negotiation.
Keeping it current
Review the agreement when new owners join, when the business raises funds, or when its direction changes. An outdated agreement can create the uncertainty it was meant to avoid.
This article is general information only and is not legal advice. The law and its application vary with your circumstances; please seek advice before acting.