Our experienced shareholder agreement lawyers can help you determine the best approach for your business so you can move forward with your commercial project with confidence.
Shareholder and unitholder agreements
Depending on how your business is structured you may need either a shareholder agreement or a unitholder agreement. A shareholder agreement is used when you have a company structure with shareholders. A unitholder agreement is used when your business has a unit trust, which has people who each hold units in the trust.
A shareholder or unitholder agreement outlines what the rights and responsibilities of the company or unit trust and shareholders or unitholders are. These are important agreements that can protect your business if something unexpected happens and makes sure the rights of shareholders, unitholders and the business are clear, saving you time and money in the future.
What your agreement should include
There are many things that you may include in a shareholder or unitholder agreement, including:
- How you will resolve any disputes that arise. The intention here is to avoid costly litigation where possible;
- What happens if shareholders or unitholders don’t agree with how management is running the organisation;
- In what circumstances, if any, another shareholder or unitholder can purchase or transfer another person’s interest in the organisation. Specifically for companies, you may also include when a shareholder has to sell their shares (often called drag-along or tag-along rights);
- When and how the company or trust can be wound up;
- How the value of the shares or units are to be calculated for a sale;
- How major decisions will be made in the company or trust;
- For companies, how the directors can be appointed and replaced; and
- What voting rights, if any, shareholders or unitholders have.
Depending on the needs of your company or unit trust, our solicitors can advise you on what your agreement should or could include to ensure your interests are protected.
Why MNG Lawyers
Our shareholder and unitholder agreement lawyers can advise you on the best way to set-up your business structure. This includes explaining what you can and can’t include in your shareholder or unitholder agreement in plain English. They will listen to your issues and concerns and can even draft the agreement for you.
Frequently Asked Questions
No, you don’t need to have a shareholder or unitholder agreement. But it’s strongly recommended that you put one in place when you set up or change your business structure as it’s good governance. Without an agreement, it’s more likely that you may encounter disagreements or disputes that can be both costly and time-consuming if you have to go to court to resolve them.