The question of unanimous approval. A critical issue often found in shareholder agreements is the requirement that all business decisions require the agreement of all founders. This is not a problem until there is disagreement between the contractors. In the absence of a formal dispute resolution process, these disputes will result in a freeze on the dead whenever there is disagreement. Not only does this create tension and frustration among founders, but it can also hinder business growth and development, as business owners are not able to effectively address important issues and make decisions. In addition, if you are married to your business partner, a shareholder pact can represent what would happen in the event of a divorce. In this first blog post, originally published as a guest blog post on the ArcticStartup website, we will present some key questions that should always be considered when creating a SHA for a start-up with working shareholders. The focus is on three different themes: an important part of creating a stable base for each startup is to ensure that the most important introductory documents are available. The shareholders` pact is one of those critical documents.
Also known as the “founder`s contract,” it is a private contract between the founders that defines their rights and obligations with respect to their interests and roles in the company. This document ensures that the expectations of all founders are clear and presents a game plan to deal with problems before they occur. A shareholder pact is important because it allows you to predict certain aspects that can have a negative impact on the progress or growth of the company. While it is true that a shareholders` pact alone will not prevent a problem, it will determine how to solve this problem and what steps must be taken to resolve it. If contractors claim that they do not need a shareholder contract because they will not have problems, they should think about “what is happening”. Often, these are circumstances that are not taken into account or thought of at the beginning of a business. Some of them that it is? Questions may be asked: a shareholder contract is a legal contract entered into by all the shareholders of the company. It regulates how shareholder transactions are managed and can help protect the start-up from unforeseen shareholder problems that can influence the success and therefore the value of the business. A shareholder contract must not be filed with Companies House, so the terms of the agreement remain confidential. A critical mistake often made by startups is the use of an online shareholder pact or the creation of their own models by combining two or more web models. While search engines have revolutionized our access to information, we should not rely on the fact that they serve as commercial and legal advisors. At the beginning of a start-up, the founders have high expectations about their idea of a company and are often convinced that it will be a great success.
At this point, many founders forget that it is also important to apply preventive measures to solve complex situations that can occur. This is why a shareholder pact can guarantee the legal security of the start-up and also help prevent situations that could jeopardize the growth of the company.