The Five W’s of a Shareholders’ Agreement

Uncategorized Aug 12, 2017

Has anyone ever told you that as a business owner that you NEED to have a shareholders’ agreement?  Did you wonder what it was?

This article sets out some of the basics.

Why?

  • Without a SA, shareholders can have difficulty resolving disagreements.
  • Unlike publicly traded shares, shares of a private company are difficult to sell or transfer.
  • The founder and majority shareholder usually wants to maintain a certain degree of control over who can become a shareholder.
  • A minority shareholder who does not have voting control of the company, will be concerned about having a mechanism to transfer his or her shares if he or she wants to.

Who?

  • If a company has one shareholder only, a SA is not required.
  • If a company is incorporated with more than one shareholder or where additional shareholders are added, a SA is recommended.
  • If the business is a partnership, the equivalent of a SA is a partnership agreement.
  • If current shareholders are considering transferring shares, they may...
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How to Read A Contract

Uncategorized Aug 12, 2017

Contracts 101

When you operate a business, contracts are as common as the air that you breathe.

You enter contracts by clicking “I Agree” buttons on websites, and by selling products and services to your customers.

A contract is a legally binding agreement between two or more persons for a particular purpose.

Contracts can be done verbally or in writing.  The problem for a business owner with a verbal contract is that if is more difficult to enforce because you may not remember or be able to prove all of the terms that were agreed to.

What if a supplier presents you with a “standard” contract that they routinely use with companies they deal with. Does this mean that you should just sign it?

At the very least, you should understand what you is agreeing to in the contract. At best, you can find a few important items in the contract and improve your business’ position through proper drafting and negotiation.

contract

What to look for:

  • Parties...
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