Do You Know How You Can Benefit From A Shareholders Agreement?

shareholders agreement

Warden Off Disputes

When you instruct a corporate lawyer to draft a shareholders agreement, you’re effectively ensuring that the company is in good hands.  Whatever happens, if any future disputes arise, they will be resolved.  Sometimes all it takes is checking a clause in the shareholders agreement, and a dispute will be settled before it even arises. 

A shareholders agreement works like a manual which includes troubleshoot sections.  All directors and non-directors that hold shares of the company, know what their function is and what profitability they’re entitled to.  It’s really all about what your job is and what money you’re entitled to. 

Shareholder, Director or Employee

You would expect all shareholders of a company to be employees, directors or owners of the business.  But in fact, some shareholders don’t even know the company owner or any of the employees.  They might not work with the company but are entitled to some of the company’s profit. 

For instance, in 2011 Twitter sold shares to anyone interested for as little as US$34.  Twitter shares were up for grabs to anyone in the world.  Anyone.  Those shareholders will not have a say in the way Twitter is run but they will collect profit (hopefully) if they decide to sell their shares.

Confused?  Don’t be.

We’re here to help.  If you have any questions relating to an existing shareholders agreement, or if you’re thinking of getting one drafted, we can help you.  We will help you understand what should be included in your shareholders agreement and will clarify any matters, any grey areas. 

Knowledge Is Power

At DG Law, we prefer it if our clients feel they’re in control of their business and investments – in control of what goes on a legal document.  It’s very important that you feel you’re in control of your assets and documentation relating to your business.  Information is power, so it’s vital that you have a solid understanding of how law works in relation to your business.  This will give you confidence in your lawyer and the decisions you make, allowing you to focus on the success of your business. SG

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