Partnership and Shareholder Agreements: Why They Matter
Importance of Partnership and Shareholder Agreements
Partnership and shareholder agreements provide comfort and confidence to co-owners and other business stakeholders. When establishing a business, owners typically conduct thorough research and due diligence. This ensures the investment of time, energy, emotion, and finances will achieve desired outcomes. Documenting agreements made during this planning phase is crucial for business success.
Business Succession and Continuity
A key aspect of business planning is ensuring business succession arrangements are in place. These arrangements address risks that could threaten business continuity, especially events involving key people or entities, like the owners. Business owners should clearly define their roles and responsibilities to each other. This includes both ongoing operations and how to handle significant events that may impact any owner’s performance.
Ensuring Family Financial Independence
For owners in multi-family business relationships, it’s vital to seek professional advice and create partnership or shareholder agreements. These agreements provide peace of mind and financial security for both the owners and their families. Including buy-sell arrangements in these agreements ensures financial independence for surviving family members. Structured estate planning further enhances this protection.
What to Do Next
While legal advisers draft these documents, the experienced advisers at Continuum Financial Planners Pty Ltd can help prepare the necessary information. This preparation can save costs with your legal team. Our mantra is simple: “We listen, we understand, and we provide solutions” through personalised, professional wealth management advice.
If you’re in a business relationship and haven’t documented an agreement yet, call us at (07-3421 3456). Alternatively, use the Book A Meeting facility at your convenience to arrange an appointment to seek advice on progressing this essential aspect of your business structure.
We thank Cornwalls Law + More (formerly McKays Law, Brisbane) for allowing us to base our article on this topic on material found in their website.
(This article was originally posted in January 2010. It has been occasionally refreshed/ updated, most recently in September 2024.)
