jk

Founders generally do not have to worry about long-term planning or estate planning issues in contracts. Avoid the agreement of seventy “all-but-the-kitchen-down” parties and go with something in line with the expected life of the agreement (for most companies, this life lasts until the next financing cycle or any other important transaction). If the founders trust each other and hold shares together sufficient to meet these fundamental thresholds, they can probably limit their shareholders` pact to a few key elements. While most of the company`s business is defined by the company`s board of directors or senior management, shareholders may, by mutual agreement, retain the right to approve certain cases before they can proceed. These questions may (i) include debt of a specified amount; (ii) the issuance of shares placed primarily in terms of preferences and privileges for common shares; (iii) the sale of the company; (iv) a substantial change in the nature of the business` business; and (v) increase in the remuneration of the founders. These issues are usually crucial for the founders, so they even need a super majority (instead of a simple majority) to vote before they are carried out. In this agreement, we have simplified the language as much as possible to make it user-friendly for companies that are not legally trained. We have structured the agreement as follows: Zegal`s shareholder contract offers a wide range of provisions. Always keep in mind that there is no “one-size-fits-all solution” and that the legal effects of different concepts must be taken into account on a case-by-case basis, in reference to the number of shareholders, the relative size of their holdings and even their respective financial capacity.

Do not include provisions in a shareholder contract without fully understanding how they work in your respective business. For startups, a timesheet is often used to define some brief conditions between co-founders and potential investors during capital raising cycles. In the initial phase of your business, if you launch this, it is important to have a clear agreement with your co-founders on the key issues that achieve the company`s goals.