Shareholder Agreement

As your business transitions from sole proprietorship to corporation it is important to develop a Shareholders’ Agreement early on when relationships are sound and all the shareholders are on good terms. This applies whether your partners are other family members or simply business partners.

One of the key functions of the Shareholders' Agreement is to stipulate how the business is to be valued and the terms for buying and selling shares in the event of shareholder premature death, long term disability, retirement, early exit or in the event of divorce of a married shareholder.

At Transitions Wealth Strategies we guide small business owners as to the importance and construct of these Agreements. Once the small business owner understands the basics, we liaise with the small business owners' accountant to get the Agreement in place. Subsequently, we work with the owners as to how to reliably fund the buy/sell terms of the Agreement. Reliance on personal funding is usually ineffective when a buy/sell event is initiated ... use of insurance strategies, either corporately or personally owned, are the norm.

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