What agreements should you sign with your partners when setting up a business?
Posted: Wed Jan 22, 2025 8:30 am
When setting up a business or company, there are all kinds of factors that you need to consider: from the support you have available to the legal framework in which you operate. Today we are going to talk about another vital element: signing a partnership agreement . We explain what it is , the clauses that should not be missing in the agreements and an example model.
What is a shareholders' agreement?
If setting up a business is an exciting adventure, signing a partnership agreement is the first step you should take to achieve stability. But what is it really?
A shareholders' agreement is a private agreement between the founders of a company that establishes the rules and procedures to be followed in various situations that may arise throughout the life of the company.
shareholders' agreement
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Its importance lies in the fact that the shareholders' bulgaria phone number lead agreement is not just a private contract between partners, but rather acts as a roadmap that defines the rules and prevents possible conflicts .
Imagine that you set up a company with the aim of creating micro-niche websites and after a few months it starts to generate money. This can be a problem if a partner was planning to share it, instead of investing. With a shareholders' agreement you can avoid all kinds of future problems , since it helps prevent and resolve conflicts between partners, defines the responsibilities and rights of each one and establishes clear mechanisms for decision-making.
Clauses in the shareholders' agreement that should not be missing
When drawing up a private contract between partners, the different clauses indicated below must be taken into account, which will make the project stable and ethical .
business partners
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Define the responsibilities of each partner: It is essential that the roles and responsibilities of each partner are clearly defined in a contract of this type . This includes the description of operational functions, day-to-day management and strategic responsibilities.
What each partner contributes: another clause in the shareholders' agreement that should not be missing is what each partner will contribute. These contributions can be in the form of capital, work, intellectual property, or any other resource .
Profit and loss sharing : Recalling the example we gave earlier, profit and loss sharing is essential to avoid headaches in the future. This can be based on capital contributions, effort, or a combination of both. In addition, it is important to include rules on reinvesting profits in the company .
Decision-making: This clause is also very important as it helps to clearly establish the procedures for decision-making, including what types of decisions require unanimity, simple majority or any other voting system.
Entry and exit of partners: It is possible that, throughout the life of the company, some partners may want to enter or leave. The agreement should include clauses on how new partners can be incorporated, the conditions for the exit of current partners and the procedures for the sale of shares.
Confidentiality and non-competition: Of course, the priority is to protect the interests of the company, so confidentiality and non-competition clauses must be included.
Dispute resolution: Another important element is that the shareholders' agreement includes clear mechanisms for the resolution of disputes, whether through mediation, arbitration or courts.
Duration and review of the agreement: Finally, the agreement should establish its duration and the procedures for its review and modification. Depending on the project, you can extend or reduce the length of the review.
As you may have seen, the shareholders' agreement is not a trivial matter , and while it is true that some clauses may be uncomfortable, it is essential to create this private contract between partners to avoid possible future setbacks.
Finally, we leave you with a model of an agreement between partners of the Complutense University of Madrid that you can download through this link .
At MÁSMÓVIL NEGOCIOS we hope to have helped you understand what a shareholders' agreement is and the importance of signing this type of contract, in addition to the clauses that it should include, and an example.
What is a shareholders' agreement?
If setting up a business is an exciting adventure, signing a partnership agreement is the first step you should take to achieve stability. But what is it really?
A shareholders' agreement is a private agreement between the founders of a company that establishes the rules and procedures to be followed in various situations that may arise throughout the life of the company.
shareholders' agreement
You may also be interested in: Fairs and events for entrepreneurs in 2024 that you should not miss
Its importance lies in the fact that the shareholders' bulgaria phone number lead agreement is not just a private contract between partners, but rather acts as a roadmap that defines the rules and prevents possible conflicts .
Imagine that you set up a company with the aim of creating micro-niche websites and after a few months it starts to generate money. This can be a problem if a partner was planning to share it, instead of investing. With a shareholders' agreement you can avoid all kinds of future problems , since it helps prevent and resolve conflicts between partners, defines the responsibilities and rights of each one and establishes clear mechanisms for decision-making.
Clauses in the shareholders' agreement that should not be missing
When drawing up a private contract between partners, the different clauses indicated below must be taken into account, which will make the project stable and ethical .
business partners
You may also be interested in: External Marketing Director: Duties and How to Choose One
Define the responsibilities of each partner: It is essential that the roles and responsibilities of each partner are clearly defined in a contract of this type . This includes the description of operational functions, day-to-day management and strategic responsibilities.
What each partner contributes: another clause in the shareholders' agreement that should not be missing is what each partner will contribute. These contributions can be in the form of capital, work, intellectual property, or any other resource .
Profit and loss sharing : Recalling the example we gave earlier, profit and loss sharing is essential to avoid headaches in the future. This can be based on capital contributions, effort, or a combination of both. In addition, it is important to include rules on reinvesting profits in the company .
Decision-making: This clause is also very important as it helps to clearly establish the procedures for decision-making, including what types of decisions require unanimity, simple majority or any other voting system.
Entry and exit of partners: It is possible that, throughout the life of the company, some partners may want to enter or leave. The agreement should include clauses on how new partners can be incorporated, the conditions for the exit of current partners and the procedures for the sale of shares.
Confidentiality and non-competition: Of course, the priority is to protect the interests of the company, so confidentiality and non-competition clauses must be included.
Dispute resolution: Another important element is that the shareholders' agreement includes clear mechanisms for the resolution of disputes, whether through mediation, arbitration or courts.
Duration and review of the agreement: Finally, the agreement should establish its duration and the procedures for its review and modification. Depending on the project, you can extend or reduce the length of the review.
As you may have seen, the shareholders' agreement is not a trivial matter , and while it is true that some clauses may be uncomfortable, it is essential to create this private contract between partners to avoid possible future setbacks.
Finally, we leave you with a model of an agreement between partners of the Complutense University of Madrid that you can download through this link .
At MÁSMÓVIL NEGOCIOS we hope to have helped you understand what a shareholders' agreement is and the importance of signing this type of contract, in addition to the clauses that it should include, and an example.