The Basics of a Shareholders’ Agreement
Selling stock in a business, also known as going public, is a popular way for small businesses to gain the finances they need to grow. The people who agree to buy stock (also known as shares) in a business are known as shareholders. As partial owners of the company, they generally have a significant say in how the company will be organized and run.
If you decide to go public with your company, you may be involved in drafting a shareholders’ agreement at some point. This agreement will contain important information about how shareholders will work together and how your business will be structured. To learn more about the process of working with shareholders, call the Des Moines shareholders’ agreement lawyers of LaMarca Law Group, P.C. at (877) 327-2600.
What Goes into a Shareholders’ Agreement?
A shareholders’ agreement can be an important supplement to a company’s constitutional documents. It is a confidential agreement that must be unanimously approved by all shareholders. Its purpose is to address a variety of issues that may arise during your business’s operations, such as:
- Disagreements between shareholders and the Board of Directors (if your business will have one)
- Disagreements among shareholders
- The death or opting out of a shareholder
- The end of the company
- The role shareholders will play in running the business
There is a lot of flexibility in writing a shareholders’ agreement. Some companies’ shareholders only convene for major events, while other companies are entirely managed by shareholders rather than a Board of Directors. Our experienced Des Moines shareholders’ agreement attorneys can help you make solid choices about the formation and future of your company.
Disagreements between companies and their shareholders can create long and expensive legal battles. To learn about protecting your business from costly litigation, contact the Des Moines shareholders’ agreement lawyers of LaMarca Law Group, P.C. at (877) 327-2600.