Why Shareholder Agreements are Essential:

The reality is that business partners will have disagreements. Corporations with more than one shareholder should have a shareholders agreement in place to deal with shareholders’ expectations from the beginning. In its simplest form, a shareholders agreement is an agreement that outlines the relationship between shareholders. Although there is no legal requirement for a company to have a shareholders agreement, it is in the best interest of shareholders to have one. It is the most cost-effective way of dealing with issues when they arise. By outlining rules, rights, and obligations early on, shareholders form an essential foundation that will help corporations grow while managing risk.