Shareholder, unitholder & partnership agreements
If you are entering into a business venture with someone else (whether it be as a company, trust or partnership) you need to document your legal rights and responsibilities to protect your interests now and in the future.
Without the right documentation in place in the early stages of the business relationship, you are exposing the business to major risks such as potential litigation that could have been easily avoided.
Questions to consider if you are entering into business with someone else
What is the process if a party dies or wants to exit the agreement?
Without an agreement as to an exit strategy, and if a dispute arises in the future parties will end up in a legal battle with the end result being decided by a judge.
Do the parties wish to retrain each other in investing or working for competing businesses?
A well-drafted restraint clause should consider the views of the court’s opinions. The court approaches these restraints in these sorts of agreements having regard to mutual obligations, legitimate business interests, independent legal and accounting advice, the risk of losing relationships with clients, confidentiality and the overall reasonableness of the restraints and parties acknowledging that the restraint is reasonable.
How should the parties resolve disputes?
Alternate dispute resolution methods should be the first point of call when a dispute arises between the parties, and they are unable to reach an agreement on their own. By agreeing to a process from day one that is documented, parties have a clear understanding as to how to deal with disputes before having to proceed to litigation. This mitigates the risk of costs and timely court battles in the future.