Law Offices of Fredric D. Abramson

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Why a Shareholder Agreement is important

Posted on June 15, 2017 at 11:20 AM Comments comments (0)

In business, planning for the unexpected is as important as understanding your customer. Too often, the small company with a few shareholders or partners operates on handshakes and verbal agreements. This can work when things are going well. But what happens when one of the shareholders dies, or gets divorced, or leaves the company? How are the other shareholders and partners protected? How is the family of the deceased shareholder/partner protected? Can the business survive without huge disruption and too often major disputes? 

These issues can be addressed in a well-crafted shareholders agreement. Sure there are lots of templates on the Internet. But the real challenge you have is to understand what specific language is best suited for your business, and your life situation. Because a poorly crafted agreement can be worse than no agreement at all.