Shareholder’s agreement

Shareholder’s agreement

If you elect to associate yourself to create a company, we recommend that you enter a shareholder’s agreement beforehand. In certain circumstances such an agreement is mandatory.

The shareholder’s agreement is particularly used to establish how disagreements will be solved.

For example:

  • If your partner wants to sell his shares of the company after a few years of operation, what will be their value?
  • A shareholder passes away; he has bequeathed his shares to an heir. What will you do if you don’t get along?

It is best to consider all potential conflicts from the start rather than having to resolve them later in court. In the latter case, you may end up losing a lot of money if not your company. We recommend you get the help of a lawyer or notary to prepare your agreement.

Elements to include in a shareholder’s agreement

  • Identity of the partners;
  • The financial contribution of each partner;
  • Involvement of each partner in the company;
  • Description of their respective tasks;
  • Information on the life insurance plan of each partner;
  • Salary and dividends of each partner;
  • Allocation of the profits or losses;
  • Terms covering the departure or death of the partners;
  • Terms in the case of bankruptcy;
  • Non-compete clause;
  • Signature of each partner and a witness;
  • Date of the signature of the agreement.
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