- Six Things that Can Keep a Business from Growing
- Avoiding the Wealth Creation Con Artists
- Why Business Owners Should Think Like Futurists
- 4 reasons to consider refinancing your home loan
- Does your super fund provide enough life insurance cover?
- Succession plan basics for small business
- Matters to Consider Before Setting Up an SMSF
- Should you register for GST?
- Finance options for buying a car
- 7 Useful Web-Based Software Programs for SMEs
- ATO ANNUAL REPORT
- How The Cloud and Automation Make Business Management Easier
- Buying Property? Why You Should Care About Interest Rates
- Buying property through SMSF – what are the rules?
- Big data for small business
- HIFX - INTERNATIONAL PAYMENT EXPERTLY DONE
- Budget Alert – Should you put in place a Transition to Retirement strategy?
- FBT 2016 - WHAT YOU SHOULD KNOW
- How New Laws May Impact Your Use of an Earnout Right when Buying or Selling a Business.
- Transfer of Business Assets & Private Company Shares
- Financial Future Checklist
- 6 Things that Work Better in The Cloud
- Can better inventory management improve business performance for Manufacturers?
- 5 Top Causes Of Stress for Small Business Owners Open page Preview for 5 Top Causes Of Stress for Small Business Owners
- 5 Reasons for Cash Flow Problems in Small Businesses
- Key man insurance, who do you need to insure?
- Buying A Business? 5 Red Flags to Watch Out For
- Should You Take Your Small Business National?
- Upfront costs when buying a home and how you could save
- Insourcing vs outsourcing vs co-sourcing
- Saving Tax Through Successful Loan Structuring
- Buy/sell agreements - do you need one?
- Changes to overseas working holiday tax
- Employment and the 457 visa
- Exciting new service offering at YML!
- Right Corporate Structuring
- Stamp Duty
- Annual Wage Review
- Interest Only Loans
- GOVERNMENT ANNOUNCES CHANGES TO THE WORKING HOLIDAY VISA MAKER PROGRAM
- Federal Budget 2014-15 Update
- YML Insight February 2015
- YML Insight March 2015
- YML Insight April 2015
- 2015 Federal Budget Report
- YML Insight June 2015
- YML Insight July 2015
- YML Insight August 2015
- POWER BI - BUSINESS DATA TOOL
- The Importance of Estate Planning
- Tax Time Checklist for Individuals
- Federal Budget May 2016 - Superannuation and Social Security
- SuperStream Deadline for Small Employers
- Land Tax Surcharge and You
- Tax Liabilities to be reported to Credit Agencies
- Business Process Improvement
- Business Valuation
- Prepaying Interest
- Superannuation Contributions at EOFY
- Financial Year End Planning
- How Business Process Outsourcing can bring value to your customers through technology
- Equity Crowd-Funding
- Mortgage Insurance
- 457 Visa
- Insurance in Super
- GENERAL SKILLED MIGRATION (GSM)
- Super Guarantee – What Happens When You Get It Wrong
- Business Process Outsourcing – Take the Technology View
- The Importance of Estate Planning
- PRINCIPAL-AND-INTEREST VS INTEREST-ONLY
- UPDATE YOUR WILL
- SAFE HARBOUR FOR DIRECTORS OF STRUGGLING COMPANIES
- PENDING 457 VISA CHANGES in MARCH 2018
- REMINDERS! LAND TAX REGISTRATION and DEED OF VARIATION
- UPDATING SMSF TRUST DEEDS
- SMSF - $1.6 MILLION TRANSFER BALANCE CAP
- CONTRACTOR vs. EMPLOYEE – EMPLOYER OBLIGATIONS
- RPA for VEHICLE FLEET MANAGEMENT
- TRUST DISTRIBUTION IN 2018
- TAX PLANNING
- THE IMPORTANCE OF WITHDRAWING YOUR MINIMUM PENSION
- AUDIT INSURANCE – ATO Increasing Audit Activity in the Areas of Income Tax and Supe
- What does the NEW 482 Visa mean for your business?
- GST on Property Transactions has changed from 1 July
- YML MIGRATION – WHAT CAN WE DO FOR YOU?
- INVESTMENT LOANS – IS IT WORTH TAKING OUT PRINCIPAL + INTEREST at 3.89% RATE*?
- GLOBAL TALENT SCHEME – Get the expertise your company needs…
- It’s started – Single Touch Payroll (STP)
- CAR LOAN – HERE’S AN OFFER
- Over 65? Downsize your home to contribute to your super!
- NEW Skilling Australians Fund (SAF) Levy
- Superannuation Guarantee Amnesty – Self-Correct your past Super Guarantee Liability
- Non-Residents and SMSFs – Tax Alert!
- Proposed Partner Visa Changes – NEW Two-Step Process
- Should I ‘fix’ my home loan?
- Working with Remote Staff – Business Process Outsourcing
- ATO Payment Arrangements – Avoid Overseas Travel Ban
- Taxable Payments – New Compliance for Couriers and Cleaners
- Government announces Changes to the Working Holiday Maker Programme
- NEWS! CGT Main Residence Exemption to End for Foreign Residents
- BUY / SELL Insurance – What is it and how can it help your business?
- Working from home: What deductions can you claim?
- Applying For A Mortgage Is No ‘Walk in the Park’
- Other Topics
- WORK RELATED CAR EXPENSES - WHAT'S LEGAL?
- WHAT IS THE BEST WAY TO PAY OFF YOUR DEBTS?
- Business Protection Insurance
- Aiming to Make a Final Non Concessional Superannuation Contribution for 2016? Be Careful!
- Getting Organized and Planning Effectively This EOFY
- New Withholding for Non Residents
- Four Per Cent Stamp Duty Surcharge for Overseas Investors Buying Residential Real Estate in NSW
- Co-Sourcing: An Alternative To Out-Sourcing
- What Small Business Expenses Can You Claim?
- Israeli Tax of Trusts
- New Superannuation Rules
- YML Group App - Coming Soon
- Obtaining a Business Skills Visa
- Quick Tips to Pay Off Your Mortgage Sooner
- FBT on Christmas Gifts and Tax Deductibility of Christmas Parties
- Changes to the Assets Test for Centrelink Aged Pensions from January 1st 2017
- Why You Should Consider Co-Sourcing for your Business
- Is It Worth Fixing Your Loan?
- Co- Sourcing
- Shareholder's Agreements
- FAMILY TRUST DEED VARIATION
- ENCOURAGING NEWS FOR Permanent residency (pr) APPLICANTS
- TSS has replaced 457 Visa Program – What is TSS?
- Introducing YML Migration
If you are knee-deep in founding a start-up, onboarding new investors, or looking to protect the company you have built, a shareholder’s agreement may be required. These agreements can be crucial to protecting operational integrity, and should be thoroughly drafted and reviewed by a legal advisor.
What is a shareholder’s agreement?
There are a couple of situations where a shareholder agreement may be a legally advantageous document to have on hand for operational decisions. This document sets out key parameters for business operations, including executive or director level behaviour, voting rights, and other financial concerns involved in a partnership of any sort.
There are two main situations where a shareholder agreement would be drawn up:
1. Company ownership b shareholders (partnership)
In this scenario, a number of shareholders who work within the company may wish to have management or decision (board) rights. This agreement will define how the company will run, and how key decisions will be made (e.g. company sale, or executive appointments).
2. Company investment (capital rasing, or passive investment)
In this scenario, an existing company may raise additional required capital by inviting investors willing to play a largely passive role in the company (i.e. provision of capital, minimal decision rights, etc.) An agreement will define how the company should continue to run, and any changes that may occur due to the new investor.
A shareholder agreement would also be used where two companies form a joint venture which will conduct operations through a third, jointly owned company.
strong>Do I need one?
A shareholder’s agreement can be a useful legal tool in many circumstances, and allows all interested parties to be fully aware of how many business and operational decisions will be made in a range of situations, ahead of the potential situation. CPA Australia explains that “while the Corporations Act does not require companies to have a Shareholders Agreement, having one can be beneficial for setting ground rules about issues that affect shareholders, such as one shareholder deciding to sell their share later, where the conditions for doing so, have already been worked out in a signed Shareholder Agreement.” (CPA Australia)
If you’re unsure whether or not a shareholder’s agreement would be of benefit to your company, a financial and legal advisor can provide valuable insight into making this decision.
What is covered in an agreement?
The topics and decisions covered in a shareholder’s agreement can vary, as this document can be tailored to the purpose and needs of the individual business; in addition to this, there may be industry-specific situations requiring attention.
However, there are a number of key items that would traditionally be covered in a shareholder agreement. Some of these are:
- Appointment or termination of executive-level employees
- Decisions requiring a unanimous vote
- Delegations and their use
- Shareholder meeting frequency
- Director’s key performance indicators
- Dispute resolution
- Sale or liquidation of the company
High-level, high stakes decisions around items such as those listed above can play a crucial role in the success or failure of a new company; this is why a detailed and methodical shareholder’s agreement can be invaluable in times of operational stress.
How can YML help?
Talk to our legal department today to see how YML Group can assist you with your shareholder’s agreement. Contact us on (02) 8383 4400 or by visiting the Contact Us Page