Why should you sign a shareholder agreement with your business partner?

In Australia, shareholder agreements are very important. The content of a shareholders agreement generally includes:

• Shareholders’ voting rights;
• Shareholder roles and responsibilities;
• repayment arrangements; and
• Profit distribution, etc.

If the partners do not sign the shareholder agreement, once a dispute arises between the two parties in the future and a settlement cannot be reached, there is a high chance that a lawsuit will be filed and resolved in court. In addition, in the absence of a shareholder agreement, partners with less shareholdings will have little say.

Therefore, if you want to started a business with a business partner, or have already started a business but have not signed a shareholder agreement, we strongly recommend that you contact a commercial lawyer immediately to understand and sign the shareholder agreement as soon as possible to protect your rights.

Source: https://asic.gov.au/for-business/running-a-company/company-shareholders/

*Disclaimer: The above content is to provide general legal knowledge, and should not be regarded as targeted questions for your individual problems. The law is complex and we strongly recommend that you seek professional legal advice. Canaan Lawyers will not be liable for any loss or damage caused by any person due to the information contained or omitted in the above content.