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What is included in a shareholders agreement?

| Mar 11, 2021 | Business Litigation |

A shareholders agreement is a document that is an agreement between the different owners of stock in a Texas company. It should include a description of the different parties involved in the first section. The whereas clauses are one of the main parts of the document that includes the mutual understanding between the multiple parties. The document should also include the company management and operation, as well as actions involving shares.

Prohibitions against conflicts of interest, information about annual and periodic meetings, and the effects of non-compliance are also common parts of such an agreement. A business law attorney can assist in creating the document to avoid common mistakes.

Other elements of a shareholders agreement

When you are creating a shareholders agreement, it is important to keep a copy in your records. The document should include a list of the parties to it, the names of the board of directors and company management, and a list of any conflicts of interests among some of the shareholders. Shareholders agreements also include the name of the state under which it will be governed, the effects of non-compliance, and, if desired, a waiver of arbitration. This process should be in detail in a separate subsection. Each company is different, which means you may need to include additional information. Everyone should get a clear understanding of their role. It should also allow for transfers of shares to other parties and the mechanism for doing so.

Who can you contact for legal assistance?

It is recommended that you have a business law attorney who has experience with these types of contracts work with you in the preparation of the document. If that is not feasible, you should at least have legal counsel review it before it is signed in order to ensure that it contains all of the necessary elements to make it a document that is binding on all parties.