A shareholders’ agreement is a contract between the shareholders of a company that outlines their rights, obligations, and responsibilities, as well as the rules for managing and operating the company. This agreement is especially valuable for private companies, where shares are not publicly traded, and the number of shareholders is often smaller.
Shareholder Agreements more specifically outline decision-making authority, voting rights, dividend and profit distribution, conflict resolution, exit strategies and buyout options, as well as confidentiality clauses and board composition.
By having a shareholder’s agreement, you clarify expectations and prevent disputes, protect shareholders, safeguard business interests and offer stability when unplanned events are faced. A shareholders’ agreement is invaluable for most private companies, especially those with multiple shareholders or plans for future growth. It provides a framework for handling ownership changes, managing disputes, and protecting both majority and minority shareholders, ultimately creating stability and clarity in the business.
By working with a legal professional, the agreement can be tailored to fit your company’s needs and protect all parties involved.
If you have any questions about the topic discussed in this article, or any business law matter, please give us a call at Bononi & Company in Greensburg, PA 724-832-2499.