Why You Need a Shareholders Agreement for Your Company in Melbourne

Shareholder disputes

A shareholders agreement is not a legal requirement; however, it plays an essential role in setting out the rights and obligations of company shareholders. They can also help avoid costly, lengthy and stressful shareholder disputes by outlining a clear process for resolving issues. At Melbourne Law Studio, we can help companies in Victoria establish a shareholder’s agreement that is effective and fair.

Benefits of a Shareholders Agreement

A well-drafted shareholders agreement creates certainty and clarity around the responsibilities of the shareholders and how the company is run. It establishes a consensus around how decisions are made and reduces the likelihood of conflict and shareholder disputes. A shareholders agreement helps protect everyone interests while ensuring everyone agrees on the broader goals and future vision of the company. 

It also functions as a helpful reference for your role as a shareholder and gives you a chance to shape your role from the start. For example, do you want to be able to appoint a director as a minority shareholder? Reserve the right to be given a certain level of information? The shareholders agreement is where you can address these issues early and effectively.

Important Clauses to Include

To function effectively a shareholders agreement must clearly outline key rules, responsibilities, obligations and procedures around areas that may become the source of a dispute, such as: 

  • Funding and contributions
  • Director appointments
  • Transfer of shares
  • Dispute resolution procedures 
  • Termination process
  • Confidentiality
  • Restraint of trade
  • Intellectual property 

Addressing each of these clauses properly is difficult without professional assistance. An experienced shareholder agreement lawyer can help write an agreement that is well-suited to the particular circumstances of your company and fairly looks out for everyone’s interests.

Avoid Disputes from the Beginning

Every shareholder has their own priorities and interests. If each party is honest about their concerns and future plans, it makes it easier to predict potential points of dispute and address them ahead of time. For example, what is the procedure should one majority shareholder want to buy another out at some point? It is best to come to a mutual agreement on these matters early.

Speak with a Shareholder Agreement Lawyer in Melbourne

If you need help drafting a shareholders agreement for your Victorian company, book a free 15-minute consultation with Melbourne Law Studio today. Call us on 03 9021 1421 or contact us online.

Recent Posts