Unfortunately, fallout between business partners are not that uncommon. A shareholders' agreement is a contract where the business owners stipulate the terms governing their relationship which may include:

​

• The respective roles and responsibilities

• Operations of the business (eg decision making, dividend policy etc...)

• Steps to be taken upon the occurrence of certain events (eg what happens if someone wishes to exit, incapacitated, dies, divorces or is declared a bankrupt etc...?)

• How will share value be determined if a buy-out is to take place  

• How to go about raising capital

• Any other matters not regulated by the company's constitution or the Corporations Act. 

 

Whether you are starting a new company or you own an existing company, having a shareholders' agreement to address critical issues and events could prevent unnecessary disruption to the business.