PARTNERSHIP AGREEMENTS AND SHAREHOLDER AGREEMENTS
At Vakili Law Group PC, our business lawyers have experience advising business owners, family owned businesses and privately held corporations. Our business lawyers advise clients from all industries with an emphasis on retail businesses, franchise businesses, restaurant businesses and real estate development companies.
In order, to avoid costly disputes and litigation later it is paramount to invest in a well-crafted Partnership Agreement and/or Shareholders’ Agreement. A Partnership Agreement and/or Shareholders’ Agreement is an agreement that is entered into by all the partners or shareholders of the business. Both agreements address all the issues revolving around the management, financing and operation of the company. In addition, both agreements usually include provisions dealing with transfers in shares of the company in the event a partner or a shareholder wishes to sell its interest in the company.
The rights and responsibilities of shareholders will have between themselves and the corporation is the central purpose in having a shareholders’ agreement. Its purpose is to have a system for preventing and solving problems that will invariably arise in the course of operating a business.
The following are common areas a shareholders’ agreement will address:
- How key business decisions are made;
- Which one of the shareholders will have an active role in the management of the corporation and how will they exercise that control;
- Voting rights and supermajority approval over material changes in the corporation;
- Specific duties to be assigned to each shareholder, and whether they will be employees of the company;
- Whether the company will hold life insurance policies on the lives of the shareholders to afford repurchase of shares from the shareholder’s estate in the event of a shareholder’s death; and
- Restrictions on transfer of shares to prevent an undesirable third party owning an interest in the company.
To reach an experienced Thornhill Business lawyer with expertise in drafting shareholders’ agreements and partnership agreements contact our office at 647-352-2245.