Shareholder Agreement

A shareholders' agreement is a private contract between the owners of a company (the shareholders). It sets out the rules of the game in advance: how decisions are made, how shares are sold, and what happens in the event of departure, death, disability (inability to work) or dispute between partners.

Brief

A private contract, not required by law, but strongly recommended as soon as there are two or more owners (shareholders).
Plan ahead for cases of departure, death, disability (inability to work) and dispute
Put in writing who can buy back the shares, at what price and according to what rules
The repurchase of shares is often paid for by a life insurance policy taken out on each shareholder.

Why does this matter?

It's like a prenuptial agreement signed while everything is going well: nobody likes to think about it, but now is precisely the right time to do it. Imagine two partners with equal shares; one dies suddenly. Without an agreement, their shares pass to their heirs, who become your new business partners overnight, without ever having worked in the company. An agreement typically stipulates who buys out the shares, at what price, and how the buyout is paid for, often through a life insurance policy. If you have two or more owners without an agreement, make it a priority this year. Bankeo will introduce you to a certified accountant free of charge, who will work closely with your lawyer or notary, and we'll be there to support you every step of the way.

Frequently asked questions

What is a shareholders' agreement and is it mandatory?

This is a contract between the owners of a business that sets out the rules of the game between them. No law requires it, but as soon as a business has two or more owners, it is one of its most important documents: without it, a death, a disability (inability to work) or a dispute ends up in court, at the worst possible time and at the worst possible cost for everyone.

What is a shotgun clause?

This is a way to break a deadlock when two partners can no longer agree. One partner offers to buy the other's shares at a given price; the other then has two choices: sell at that price, or buy the first partner's shares themselves at the same price. The offer must therefore be fair, otherwise it can backfire on the one making it.

Who should accompany me to draft the agreement?

A lawyer or notary drafts the contract, but your accountant plays a key role: how to calculate the company's value, how to finance the buyout through life insurance, and what taxes will result from the share transfers. Bankeo will introduce you to a vetted accountant free of charge, who will work in collaboration with your legal advisor, at no cost to you, and we'll be there to support you every step of the way.