Yes, a shareholders agreement would mitigate having to transfer half of your shares in a divorce to an ex-spouse. A clause can be included in a shareholders agreement that states that the shares of your business cannot be transferred to an ex-spouse upon equalization.
A shareholders agreement would mitigate against this situation by restricting the shares from becoming a part of a deceased shareholder’s estate; instead the surviving shareholders will be given the right to purchase the shares and provide the family with the cash equivalent of the shares instead of the shares themselves.
Yes, a shareholders agreement could mitigate against this by apportioning the distribution of profits, pursuant to what is fair between an active, participating shareholder and a passive shareholder, in the event one shareholder is unable to contribute to the business for a long period of time.
The question of whom you can sell or divest of your shares to—whether or not the other shareholders have first of refusal—should be decided in a shareholders agreement. Furthermore, the method of valuation of your shares must also be laid out in the shareholders agreement. Failing to do this will result in disputes that can lead to a deadlock. The shareholders agreement should also include who in the company has the tie-breaking vote in making decisions such as these.
Yes, a shareholders agreement should include the process of how disputes between shareholders will be resolved. How to resolve disputes central to the operation of the business, including brand name, marketing plan, investors, strategic direction, structure, etc. should be included in a shareholders agreement, including who will have the tie-breaking vote and when to refer the matter to private arbitration.
