Drafting Shareholder Agreements

A carefully drafted shareholder agreement secures the interests of both the shareholder and the company.

Your business partner has been ill often, and their work input and motivation have been declining for a while. You've been working even on weekends to ensure that customers get what they've been promised.

You verbally discussed during the founding phase of the company that all decisions would be made unanimously. All important investment decisions for the future of the company have been left unmade due to your partner's absences. You cannot make decisions alone because you agreed on unanimity.

The purpose of the shareholder agreement is to pre-agree on critical matters such as decision-making, work obligations, distribution of responsibilities, and how to proceed if a shareholder does not comply with the terms of the shareholder agreement. The shareholder agreement protects you, your company, and its competitiveness.

Test if you need a shareholder agreement

Do you have a business partner?

We always recommend drafting a shareholder agreement if there is more than one shareholder. Drafting a shareholder agreement is always easier with fewer shareholders. A shareholder agreement can also be drafted later in the business's lifecycle, for example, as the business expands.

Do you want to ensure that your business continues in the future among the partners?

If no rules for the transfer of shares have been agreed upon, shareholders may sell or gift their shares in any manner they choose. This could potentially allow any person, including undesired individuals, to become shareholders. Therefore, it's prudent to prepare by drafting a comprehensive shareholder agreement, which clearly stipulates different scenarios of share transfer, such as sales and thus the sales price and schedule for disengagement. It's also advisable to agree on a buyback clause. Often, the agreement also includes non-compete and non-solicitation clauses, enforced by contractual penalties.

Do you want to focus only on business and forget all disputes between shareholders?

A shareholder agreement pre-agrees on difficult but important matters. The business suffers if it is not agreed how to handle conflict situations. For this reason, it is prudent to prepare by drafting a comprehensive shareholder agreement, the cost of which is significantly lower than the cost of litigation.

When one shareholder works more than others, but the assets are divided equally. Is there anything that can be done?

The shareholder agreement can specify the work contributions of the shareholders and the compensation they receive. Shareholders can agree that a shareholder who performs certain tasks can receive compensation based on their duties and responsibilities, separate from dividend distributions.

Are you a minority shareholder and want to ensure that you are also heard?

A shareholder agreement can provide more comprehensive protection for a minority shareholder than what corporate law typically provides by default. Decision-making can be protected in the shareholder agreement in favor of the minority shareholder by requiring, for example, that certain decisions require the consent of all shareholders, deviating from the majority or supermajority requirements of corporate law.

We assist you remotely or face-to-face with shareholder agreements. Our law firm is located next to the Aviapolis train station, near Helsinki-Vantaa Airport. Let's first assess your situation and then arrange a free initial consultation according to your needs.