Even though many startup owners agree that a shareholders’ agreement is important, many delay putting it in place early in the business process. Two popular reasons cited include lack of time due to getting the business up and running and that all shareholders are getting along really well. To that end, Singapore company registration specialist Rikvin has today published a guide on Shareholders’ Agreements.
The guide covers the purposes of a Shareholders’ Agreement as well as salient aspects that should be considered when drafting the agreement. A shareholders’ agreement governs the relationship between shareholders and determine their rights and obligations. Important aspects covered in a Shareholders’ Agreement include Dispute resolution, Third party offers, Death, Short and Long Term Disabilities, Management of decisions, Puts and calls, Financing, Defaults and Employment.
Analysis by Rikvin shows that the value of a shareholders’ agreement far exceeds the initial cost and as such, is worth the investment. Commenting further, Mr. Satish Bakhda, Head of Operations at Rikvin said, “The busy-ness of running a small business should not distract business owners from seeing the importance of a shareholders’ agreement. Shareholders’ agreements serve a wide range of purposes and can protect a company from unprecedented disputes and losses.”
Many new business owners take their relationships for granted, especially when doing business with people they trust. Like marriages or relationships, the initial stages are almost always pleasant.
However, disputes may arise during the course of the relationship and unfortunately, the goodwill and trust may deteriorate to a point where it is not possible to sign a shareholders’ agreement. The business is then lost.”
“Furthermore, many new business owners take their relationships for granted, especially when doing business with people they trust. Like marriages or relationships, the initial stages are almost always pleasant. However, disputes may arise during the course of the relationship and unfortunately, the goodwill and trust may deteriorate to a point where it is not possible to sign a shareholders’ agreement. The business is then lost,” he added.
Rikvin’s recently launched Document Drafting and Vetting Service includes the drafting and reviewing of a shareholders’ agreement. The service, which is offered at an affordable price, is rendered by Rikvin’s legally-trained consultants.
“Once all company’s shareholders have agreed on the material terms to govern the relationship, our consultants will advise on how best to protect everyone’s interest,” affirmed Mr. Bakhda.
