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!

 

–  –  –

This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

What you don't know can hurt you! Subscribe to stay informed.

Sign up now and receive an email when we publish new content.

We will never give away, trade or sell your email address. You can unsubscribe at any time.