Shareholders agreenements

A Shareholders Agreement is different to the constitution of the company. Shareholders Agreements protect you as a shareholder. Unless the company is listed on the Australian Stock Exchange, you should always have a Shareholders Agreement to protect the relationship between yourself and other shareholders. A Shareholders Agreement governs the relationship between respective shareholders in a given company. It covers matters such as initial funding, an appointment of directors, relations between shareholders and the disposal of shares. It can also cover things such as the rights on winding up of a company, the allotment, transfer and encumbrance of shares, matters requiring directors’ approval, guarantees and indemnities, further financing and various other matters.

It is imperative that if you are entering into a business transaction or relationship which involves a company structure that you consider having a Shareholders Agreement if there is more than one shareholder in the company.

For more information on any of the above matters or if you have any questions, please feel free to contact us.