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There is a really good article on Advisor.ca about shareholder agreements.
When you are involved in a business with other people, there is a lot of excitement getting started and we just want to hit the ground running. That’s all well and good until someone gets hurt! Do I sound like your mother now?
Who gets control of your partner’s shares if they die? Do you really want to work with their spouse? Are they capable? God forbid they live! What happens if one of your partners gets into an accident? Who is their power of attorney and makes decisions for them when they are incapacitated?
These are just some of the things that need to be considered. There is so much more and you should certainly get advice from your professional support. I would suggest you need a combination of your accountant, your advisor and your lawyer. This isn’t something that I would recommend using an online form to accomplish.
I can tell you a story about someone who didn’t have a partnership agreement. One of the partners took a liking to white powder. This lead to missed deadlines and a lack of proper participation in the operation of the business. Over time, it ended in bankruptcy. It could have been avoided if there was a partnership agreement in place providing for an escape from the partnership. It is always better to agree up front how to disolve a partnership when it becomes unworkable.
Not having an agreement is like working on a trapeze without a net. Not my advice!
That being said, with a partnership or shareholder agreement, you can have peace of mind and focus on your business rather than fearing what might happen and having that be a distraction. Planning ahead always makes the journey easier and generally a lot more fun!
Make it a great day,
Barry
P.S. What am I thankful for today? I’m thankful for the time I spent as a financial consultant. I’m thankful this country offers such opportunity to make a great life. I’m thankful God gives me such support through friends and family.
What are you thankful for today?
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