One of the most important documents for a company, let’s see why...
Shareholders have control of the company and naturally the more persons there are with similar controlling power the more necessary it is for there to be a private governance document in place. The below gives us an idea of the elements of a SHAG, to help us prepare for such a key contract with both current and future shareholders in mind.
Discuss with Janey on what will be relevant for you so that she can prepare a shareholders agreement specific for your business.
Purpose
- Private governance document for shareholders.
- Fit for business type.
Financials
- When the company needs capital, does it first seek it from the shareholders or a bank?
- Valuation methods.
Pre-Emptive Rights
- What happens when shareholders come and go?
- How are shares protected from dilution?
Major Decisions
- When does a shareholder jump in on how the company operates?
- Do shareholders need to meet up regularly & can they meet via Zoom?
Benefits
- Dividend policy.
- Shareholder indemnities.
- Current accounts.