In recent months we have seen plenty of examples of the hurdles that have to be overcome when there is no existing shareholder agreement in place.
The absence of shareholders’ agreements among New Zealand’s mid-sized companies is a stumbling block that often results in costly disputes over how private companies are run, valued, and changes in shareholders. When you get into business with a partner or partners (friend, family member, or a business acquaintance), you do so with the best of intentions. In many cases, the apparent need for a Shareholder’s Agreement goes unnoticed. In fact, you may be embarrassed to bring up the idea
But a Shareholder’s Agreement is so much more than just something to deal with the breakdown of a business relationship. Life happens while we are busy making plans, and sometimes life’s happenings can throw us curve balls that will affect not only our relationships, but the business. Disabilities, untimely deaths, marriage breakdown, and simple falling-out between partners can mean disaster if these scenarios (and others) have not been given due consideration.