This article posted on our partner site Mondaq.com discusses certain issues that should be resolved and addressed when developing a shareholders’ agreement.
Whether or not shareholders are family related, the agreement should specify (among other things) the base salary for each shareholder, the amount of any dividends, whether unanimous approval is required for business decisions, whether non-compete covenants will be included, and an exit strategy for shareholders who want to leave. The author also notes that specific considerations should be made when children are working in a family business (e.g., what are the formal training requirements, what will the compensation be, what is the definition of “just cause” for termination).
This comes to you as a part of Clausehound’s exciting new collaboration with Mondaq!