James Ballantyne’s presentation here [video included] serves as a reminder that while no one enters a business expecting disputes, carefully designed shareholders agreements can safeguard the business and foster a prosperous future for its stakeholders.
These agreements become vital tools in building a solid foundation for business growth, providing decision-making processes that align goals, resolve disputes, ensure fair valuations, and more.
Exit strategies are important. Whether it is an uncomfortable social gathering on a Tuesday night or your retirement plan, having a departure strategy allows you to move forward with confidence. One of our good friends shamelessly “smoke bombs” at exactly 8.18pm from virtually every event he attends – it is an exit strategy that works for him. Estate and Succession planning allows business owners to give certainty to their families and business partners about their departure plans.
Left unresolved, a shareholders dispute can significantly impact on a company’s profitability, if not destroy the company and irreparably damage the relationship between the shareholders. As with all disputes prevention is almost inevitably better than the cure, and in the case of a proprietary limited company, prevention means a properly drafted shareholders agreement (or similar document). A shareholders agreement should, at a minimum, contain clear guidelines for dealing with potential and actual shareholder disputes and may enable parties to engage in cost effective and cost-effective alternative dispute resolution strategies to prevent costly litigation.