It’s important to have written agreements before starting any joint project, no matter how casual the relationship. A written shareholders’ agreement is a way for those who have a stake in a business to agree terms between them to control how a company is to run.
Why is a shareholders’ agreement important?
A shareholders’ agreement is important as it can cover many issues not dealt with by the Memorandum of Incorporation of the company, or company legislation itself. Where there is no agreement in place for your company, shareholders are typically treated equally and share dealings are governed by legal rules that may not necessarily take into account the aims of the founders of the business.