Shareholder Agreements For Startups

If contractors claim that they do not need a shareholder contract because they will not have problems, they should think about “what is happening”. Often, these are circumstances that are not taken into account or thought of at the beginning of a business. Some of them that it is? The questions could be: the question of unanimous approval. A critical issue often found in shareholder agreements is the requirement that all business decisions require the agreement of all founders. This is not a problem until there is disagreement between the contractors. In the absence of a formal dispute resolution process, these disputes will result in a freeze on the dead whenever there is disagreement. Not only does this create tension and frustration among founders, but it can also hinder business growth and development, as business owners are not able to effectively address important issues and make decisions. If your start-up does not have a shareholders` pact and a dispute arises, it is an additional cost in litigation and settlement negotiations that the shareholders` pact would have been at the beginning. A shareholder pact should essentially be the cornerstone of any business project between founders and partners. For all of the above and for many other issues, the shareholders` pact should serve as a guide to tell us how we act and what the consequences would be in those situations. As a result, a non-share agreement would increase legal uncertainty for both shareholders and the company itself. An important part of creating a stable base for each start-up is to ensure that the most important introductory documents are available. The shareholders` pact is one of those critical documents.

Also known as the “founder`s contract,” it is a private contract between the founders that defines their rights and obligations with respect to their interests and roles in the company. This document ensures that the expectations of all founders are clear and presents a game plan to deal with problems before they occur.

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