Owner Operating, Shareholder, and Other Business Agreements

Owner Operating, Shareholder, and Other Business Agreements

One of the most critical elements of going into business with a partner is to have an agreement as to how to operate the business.  These documents serve as a legal contract between the business owners and the business itself. It typically spells out terms that detail the management of the business, distribution of profits and losses, and all other internal operations of the company.  By having these items spelled out in advance, owner can avoid future disputes and disruption to business operations.  By failing to have an agreement, you run the risk of having your business governed by the default state laws.

A shareholder agreement (also known as a stockholder agreement) is a contract between the shareholders of a corporation.  The contents in a Shareholder Agreement depends on the corporation and the shareholders, but it usually addresses:

  • Shareholder rights and responsibilities.
  • Share ownership and valuation.
  • Management of finances, business, assets, capital, and shares.
  • Rules for issuing new shares and restrictions on share transfers.
  • Actions to take upon the death or incapacitation of a shareholder.
  • Conflict of interest rules, such as a non-compete clause or non-solicitation clause.
  • Dispute resolution methods.

Essentially, it establishes the rules that govern the shareholders’ relationship to the corporation and to one another.  A Shareholder Agreement addresses important issues, such as the transfer of shares and the rights of shareholders and officers, to keep the corporation running smoothly. In summary, this internal document can protect shareholders by confirming that everyone is in agreement over the corporation’s rules, and can also be used to refer to in the event of future disputes.

We can also assist you with setting up a joint venture (JV)company and the drafting of the JV Agreement between owners, employment agreements, partnership agreements, and most other agreements relating to the operation and governance of business organizations.