If your small business is formed as a corporation and you have multiple owners, you should have a shareholders' agreement. A shareholders' agreement establishes the rights and responsibilities of all shareholders who own a share of stock in a corporation and describes how the company should be operated. We can help your company prepare a shareholders' agreement, so your business can run more smoothly.
Some typical issues covered in a shareholder agreement can include:
* Who can serve on the Board of Directors and as an officer, as well as procedures and duties for each.
* What happens to a shareholder’s equity after death, disability, or bankruptcy. This is known as a “buy-sell” provision.
* How a shareholder’s stock can be transferred or sold, including any restrictions on transfer. This might include “right of first refusal,” “drag-along” or “tag-along” provisions.
* Valuation of shares.
* How and when dividends are distributed.
* How the company will be managed.
* Non-competition obligations.
* Dispute resolution.
These are simply some of the many issues a shareholders' agreement can address -- and each of these provisions can be structured in myriad ways, depending on your current needs and future plans. We can walk you through the significance and consequence of each of these decisions and craft a shareholders' agreement tailored to your business.
We represent about 40 or so small businesses throughout Washington and Idaho. If you're a small business owner or are thinking about starting or buying a business, give us a call at 253.858.5434 to find out how we can be of service.