Agreements between owners.
WHY THEY MATTER
The articles govern the company; a shareholders' agreement governs the relationship between owners.
WHAT IT TYPICALLY COVERS
Decision-making and what requires unanimity Appointment of directors Transfer of shares and restrictions What happens if someone leaves Valuation methods Dividend policy Dispute resolution Deadlock provisions
WHY DEADLOCK PROVISIONS MATTER
Two equal shareholders who disagree can paralyse a company.
WHAT EXIT PROVISIONS ADDRESS
Death Departure Dispute Sale of the business
WHY THEY MATTER MOST
They are needed exactly when relations have broken down.
WHAT TO AGREE EARLY
While relations are good.
WHY
Negotiating them during a dispute is rarely possible.
WHAT COMMONLY GOES WRONG WITHOUT ONE
A departing founder retaining shares indefinitely Minority shareholders unable to exit Disputes with no resolution mechanism
WHAT VESTING PROVISIONS DO
Make shares earned over time rather than granted outright.
WHY THAT HELPS
A founder leaving early does not retain full ownership.
WHAT TO RECORD FORMALLY
Every allotment and transfer, in the register and with the registry.
WHAT TO ENGAGE
A solicitor, to draft it.
WHY
Templates rarely address your actual situation.
