Partnership/ Shareholders Agreements

Written on the 14th of January 2010 by Continuum Financial Planners Pty Ltd

When businesses are being established, owners usually undertake extensive research and due diligence processes to satisfy themselves that the investment (of time, energy, emotion and finances) is going to achieve particular outcomes. This is all part of business planning.

One important aspect of business planning is to ensure that business succession arrangements are in place to deal with risks to the business continuity in the face of particular events. One of the events of concern is that related to the key people/ entities in the business: the owners.

Owners in the business should establish between themselves what their respective roles are in the business – and their responsibilities to each other, both in the ongoing operation of the business and in the event that there is a significant event arise that interferes with the effective performance of any one of the owners.

To this end, all business owners who are in a multi-‘family’ business relationship are encouraged to seek professional advice and enter into partnership/ shareholder agreements for their own – and ultimately, their family’s – peace of mind.

Whilst the drafting of the relevant documents is the role of legal advisers, we at Continuum Financial Planners can assist you with the preparation of information and data that will be of assistance to the lawyers – and save you costs with them. If you are in a business relationship (either directly or through family entities) and have yet to document such an agreement, Contact Us for advice on how to progress this important aspect of your business structure: the first meeting with one of our experienced advisers will be at our cost.

We thank McKays Solicitors for allowing us to base our article on this topic on material found in their website.