By OPLawSocialMedia on Business & Business Attorney
Roy Oppenheim discusses the necessity of a shareholder’s agreement after incorporating a business. He emphasizes the importance of this agreement in establishing a framework for understanding relationships among shareholders and managing scenarios such as disability, death, departure, or selling shares. This pre-emptive agreement provides a reference for resolving issues when challenges arise, offering guidance on decision-making processes. Standard clauses are typically used in these agreements, but they can also be customized based on individual needs. Roy stresses the importance of having a lawyer to assist with the preparation of this agreement, as well as other incorporation documents like bylaws and articles of incorporation.
Hi, Roy Oppenheim, from Oppenheim Law. I want to talk to you a little bit about what happens after you’ve filed for incorporation, after you have your bylaws, you now need what’s called a shareholder’s agreement. Of course, you only need a shareholder’s agreement if you have shareholders. And if you have shareholders, we want to understand the relationship between the two of you. What happens if someone gets disabled? What happens if someone dies? What happens if someone wants to quit? What happens if one person wants to sell, and the other person wants to buy out that person? Or if you both wanna sell or anything like that.
And so, you want to have an agreement that anticipates some of these issues, so that when you’re in the trenches, in a crisis, or there’s a question about how a decision’s to be made, you just go to the agreement, you say, “Well, let’s see how we’re supposed to resolve this.” And so, these types of agreements have been around for years, many of them have traditional kinds of clauses that we like to use. And then sometimes people want to do something special or different, and we accommodate them. But either way, you ought to have an attorney involved with the preparation of your shareholder agreement, in the same way, that you should have someone involved with preparing your bylaws and your articles of incorporation. Roy Oppenheim “From The Trenches.”