Creating a new Corporation, S-Corp or LLC raises many vital legal questions that are crucial to address. Among these are the roles shareholders (or share owners) can expect to play in the company and how the company expects to move forward in the future. These questions are most commonly settled with a shareholder agreement, which outline shareholders’ rights within the company and can establish ways to sell shares to outside parties.
Having a shareholder or membership agreement in place is purely optional for parties forming a new business. However, they can be extremely useful in ensuring stockholders understand their place in the company and providing a roadmap for its future. A Kernersville shareholder agreements lawyer with Apple Payne Law can provide more information about these documents and draft them in ways that align with your interests and intentions. Our dedicated business attorneys are prepared to give you the guidance you need for the outcome you want.
A shareholder agreement (sometimes called a membership agreement as well) is a document that outlines the rights and protections of shareholders in a Corporation, S-Corp or LLC. Unlike other vital documents such as articles of incorporation or corporate by-laws, a shareholder agreement is not legally required to create a corporation. Nevertheless, they can be helpful for a variety of reasons.
These agreements explain the rules that dictate how the shareholders can exercise their power when voting on a new course of action for the company and procedures for how they may sell their shares to outside parties.
Shareholder agreements also include a capitalization table that lists the holders of all company shares and their percentage of total ownership of the company. All of this is helpful to know when determining voting power in the corporation or making provisions for the distribution of company profits. A Kernersville shareholder agreements attorney can provide more information about these complex and important documents.
While they are not a legal requirement for forming a corporation in Kernersville, these agreements can play an important role in determining a company’s future. Perhaps nowhere is this clearer than in the case of disputes among shareholders. Always remember that a shareholder agreement is a contract in the eyes of the law. This means that the shareholders can demand that a civil court enforce the contract in the event of a breach.
Additionally, the agreements themselves can contain provisions for how to deal with whatever disagreements may arise. This can include methods for voting in the event of a disagreement and remedies for parties who suffer harm because of another party’s breach. Having these documents in place when everything is good, exciting and happy in those beginning days can help not only save heartache but thousands of dollars in legal fees if there is ever a breakup or major dispute amongst the shareholders or members.
A Kernersville attorney can draft agreements that clearly explain the rights of all shareholders. This includes placing language in the contract that defines a breach, establishes protocols for resolving disputes, and names remedies that shareholders may demand if internal conflict resolution fails to bring a dispute to an end.
Several contracts go into effect upon the creation of a new Corporation, S-Corp or LLC. Many of them are required by state law, such as articles of incorporation and by-laws. Others, such as shareholder agreements or operating agreements are optional but potentially useful for the successful function of a corporation.
These documents let all shareholders know their rights under the company and create a roadmap for future decisions. They also let parties know how they may transfer their shares in the future. Finally, they can outline procedures for dealing with conflicts that may arise among shareholders and name remedies for parties in the event of a breach of the agreement. A Kernersville shareholder agreements lawyer with Apple Payne Law is ready to help your company secure its future through a comprehensive shareholder agreement. Contact them now to learn more.