At Johnstone and Reimer, we understand that strong business relationships are built on each partner or shareholder having a clear understanding of their responsibilities and obligations to both the business and their fellow business partners. Whether you are formalising an existing partnership or structuring a new company, having the right legal structure in place for your business is essential to protecting each partner’s interests and minimising the risk of future disputes.
Depending on the arrangement being entered into, the two most common agreements are:
- Shareholder Agreements
A shareholder agreement is used to set out the rights and obligations of each shareholder in a company. It can address key matters such as day-to-day management, decision-making processes, the role of each shareholder, dispute resolution, and the distribution of profits, among other important considerations.
A carefully drafted shareholder agreement not only provides clarity from the outset but can also help avoid costly disputes in the future by ensuring that critical issues are agreed upon in advance.
- Partnership Agreements
A partnership agreement establishes a clear and reliable framework for how you and your partners will work together. It outlines key matters such as the rights and obligations of each partner in the business, their respective contributions, and how profits and losses will be shared. Like a shareholder agreement, it will also address voting rights, non-compete obligations, and the process for bringing the partnership to an end. By setting clear expectations from the outset, a well-prepared partnership agreement helps mitigate the risk of a dispute between partners and supports a stable, productive working relationship as your business grows.
Our Commercial Law team can provide strategic, practical and tailored advice in the preparation and review of shareholder or partnership agreements. We take the time to understand your business objectives and can provide cost-effective and bespoke agreements that can address and clarify:
- Ownership structures and decision-making authority
- Roles, responsibilities and governance arrangements
- Profit distribution and financial contributions
- Entry and exit of shareholders or partners
- Dispute resolution processes
Our focus is on providing clear, strategic advice that minimises risk, protects your interests and supports the ongoing success of your business. To discuss how we can assist, please contact our team on (03) 8658 0040.
