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Shareholder Agreement Basics

Shareholder Agreement Basics

At Kurzban Kurzban Tetzeli & Pratt, P.A., our lawyers guide and inform clients setting up new businesses in all aspects of entity formation. When they choose to set up a corporation, one crucial document to consider is a shareholder agreement.

This is especially true for people starting small, privately held corporations. Often the shareholders are people who already have professional relationships or family connections with a shared vision that the founding shareholders will control the business into the future, free from outside involvement.

A shareholder agreement contains provisions related to corporate governance, corporate relationships, stock ownership and transfer, dispute resolution, death and disability, corporate dissolution and more. Setting up a solid, well thought out agreement at the beginning can help prevent shareholder disputes — even lawsuits — when conflict or hardship eventually occurs.

Sometimes a shareholder agreement can be set up as part of the process of founding the corporation. In other cases, conflict may require that shareholders have their own attorneys to negotiate on their behalf to reach a mutually acceptable agreement.

Benefits Of A Shareholder Agreement

A shareholder agreement regulates the relationships between shareholders and directs the way a company is run.

Florida law exerts some control over what shareholder agreements can and cannot contain. Depending on the type and size of the corporation and its business, the shareholder agreement might cover:

  • Buy/sell provisions to control stock ownership in case of shareholder divorce, disability, retirement or death, often to keep stock within the inner circle
  • Voting powers
  • Director or officer qualifications, compensation, restrictions, appointment or removal
  • Stock dividends
  • Corporate distributions
  • Dispute resolution
  • Corporate powers
  • Authority to break deadlocks
  • Corporate dissolution

If you are starting a company with more than one shareholder, make sure expectations are clear. The lawyers at Kurzban Kurzban Tetzeli & Pratt, P.A., have helped businesses throughout Florida answer questions and establish guidelines when it comes to their businesses and their shareholders.

Call Us Today For A Free Consultation

It is important to give your business a solid foundation. If you are starting a business in Miami or elsewhere in South Florida and need help creating a shareholder agreement, contact our Coral Gables office today. Schedule your free consultation by calling 305-744-5888 or filling out our contact form.

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