Shareholder Agreements

What is a Shareholder Agreement?

A shareholder agreement is a private contract made between all the shareholders of a company, setting out the rights, obligations and liabilities of each shareholder. Such agreements do not have to comply with any set form or procedure. However, they must be drafted so as to ensure that the agreement is valid and enforceable.

Our rates and fixed prices are lower than the prices charged by many Perth Commercial law firms because we own our offices so we don't pay the exorbitant St George's Tce rent that many commercial law firms do. 

A shareholder agreement needs the consent of all shareholders and, unless otherwise specified, all the existing shareholders must consent to any changes or alterations.

A Shareholder's Agreement typically contains provisions as to:

* the ownership and shareholding of each shareholder;


* the rights and privileges of shareholders, such as voting rights, right to information, dividend preferences;

* the conditions and restrictions for the sale or transfer of shares;

* dispute resolution procedures that often need to be complied with before going to Court;

* exit strategies, including the sale of the company and buyout of shareholders; and

* the processes and procedures to follow in the event of a dead-lock.

In contrast, a shareholder agreement can be an extremely useful legal document for managing any issues affecting shareholders, not covered by the constitution, which might arise in the future.

Further information can be found here regarding our fixed fees.

What Should you Include in a Shareholders’ Agreement?

Every shareholders’ agreement should be individually tailored because every company is different. The specific provisions of each shareholder agreement should take into account the number of shareholders, the objectives of the shareholders, the funding arrangements, and the nature of the business or industry in which the company operates. However, there are also some basic clauses that every shareholder agreement should have.  They can set out each of the jobs each shareholder has to carry out.

Shareholders’ Agreements usually contain clauses dealing with:

  • Deadlock provisions designed to break a deadlock among shareholders as to the management of the company;
  • Alternative dispute resolution provisions to assist shareholders to resolve disputes without recourse to legal action;
  • Pre-emptive rights provisions, such as the right of refusal if a shareholder wishes to sell his or her shares or the requirement of the consent of the Board of Directors;
  • Provisions setting out triggering events requiring the transfer of shares to existing shareholders, such as the death of a shareholder, insolvency events, serious breaches of the Shareholders’ Agreement or loss of the required certification etc.; and
  • Share valuation methods.

Our Experience

For 25 years we have prepared shareholders’ agreements, all commercial contracts and handled disputes for banks and companies of all sizes as well as for small businesses and individuals.

Disputes often occur over the terms of contracts and debt /capital disputes between Partners, Directors and Shareholders but you could also be having internal business disputes over how your business is being run, or disputes over financial returns and capital contributions.

We provide legal advice on and preparation of the best terms and conditions clauses in contracts and agreements to protect individuals, companies and businesses and to provide security.

We generally charge a fixed rate for drafting contracts, subject to the complexity of the contract.

Our practice is located outside of the Perth CBD and because of this our hourly rates are 20% lower than the standard rates charged by most Perth law firms.  Our rates are extremely competitive compared to the rates charged by other commercial law firms.

* the management of the company and the decision-making processes and procedures;