Start Up Business Shareholder Agreement

Signing a document without understanding how it affects your rights or your business is a critical mistake. You may feel bound by conditions that are not in your best interest and do not protect your business. Not understanding the effects of what you have signed does not protect you from the consequences. As has already been said, a well-functioning SHA should clearly define the roles of all shareholders, with some key employees, who are often minority shareholders, generally defined as working shareholders. Although directors are responsible for the day-to-day management of a company`s affairs, the shareholders` pact may give shareholders the right to approve certain decisions that they feel are not left to the discretion of directors (for example. B, a global pivot of the company`s activity, changes to the company`s statutes, etc.). If and if the roles of shareholders are defined, the next question is the startup`s decision-making process. In most of the startups we supported, one or two of the founders were the majority shareholders, and before outside investors came into play, we must ensure that the majority shareholders are able, in all situations, to do what is necessary to develop the start-up. In this context, the SHA must always be carefully prepared, as it is important that the SHA allow majority shareholders to retain control of important decision-making, such as the right to appoint additional board members.

It is also customary for the SHA to include lists of certain key decisions that require a qualified majority (explicitly defined as 2/3 of all votes) and/or written agreement of majority shareholders. When relationships between founders dissolve, there are often disputes over issues such as who owns intellectual property and other assets. A shareholders` pact will prevent the situation from continuing on these issues.

Posted in Uncategorized