What would you do if a shareholder of your company were suddenly unable to carry out his duties? What if there is a dispute about the management of the company between shareholders? A legally valid shareholders’ agreement is one way to protect yourself from extensive litigation to resolve issues like these.
A shareholders’ agreement is simply a contract between the shareholders of a company that defines the rights and obligations of the shareholders. The shareholders decide the terms of the agreement, such as how the company will be operated and how shares will be distributed. A shareholders’ agreement may also include how the company will be initially financed and how it will be financed in the future.
Unlike the Articles of Incorporation, the shareholders’ agreement is a private contract and may be kept confidential. For this reason, the shareholders’ agreement is a better vehicle for memorializing confidential agreements of a more sensitive nature. Nearly any agreement between shareholders can and should be memorialized in a written shareholders’ agreement.
If you have questions about drafting or enforcing a shareholders’ agreement, or any other topic concerning your new or existing business, the attorneys at the Scolieri Law Group, P.C. can help. Located in western Pennsylvania, our attorneys are experienced in Pennsylvania business law and can help you navigate regulations affecting your business. Contact us today at (412)765-0546 or firstname.lastname@example.org.