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Shareholders Agreement

Shareholders Agreement

If you decide to associate to create a business, we recommend that you first sign a shareholders agreement. In some cases, such an agreement is even compulsory.

The shareholders’ agreement serves particularly to establish what you and your associates will do in case of disagreement. For example:

  • if your partner wants to sell his share of the business after a few years of operation, how much will this share be worth?
  • a shareholder dies, he bequeathed his share to an heir. What do you do if you cannot reach an understanding with the latter?

It is better to consider all possible conflicts from the start rather than having to settle later in court. In the latter case, you could lose a lot of money or jeopardize your business.

We recommend that you seek the help of a lawyer or a notary to prepare your agreement.

Elements to include in a shareholders’ agreement

  • Identity of the associates
  • Each one’s financial participation
  • Commitment of each partner in the business
  • A description of their respective tasks
  • Information on the life insurance plan of each partner
  • Each one’s wages and dividends
  • Distribution of profits or losses
  • Procedures in case of departure or death of the associates
  • Bankruptcy terms
  • Non-compete clause
  • Signature of each partner and a witness
  • Agreement signature date

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