Create Confidence and Trust with a Shareholders Agreement (SHAG)
Whether you have many or only two or three shareholders, I highly recommend a simple shareholders agreement (SHAG) to start your business venture off with the highest degree of confidence and trust.
Shareholders agreements address what is intended to happen in often contentious situations related to your business – e.g. a third party offer for someone’s shares, the death of a shareholder, or the need for someone to sell their shares. Resolving them in advance will tell you a lot about yourself and the other shareholders - its like a business pre-nup. Questions related to these types of events if left unaddressed will still exist in your subconscious and can become activated during periods of distress between shareholders when it is no longer optimal do be deciding these things in a way that is in everyone’s best interest. By addressing them in advance, I find that the trust level starts at a much higher place making everyone more open and productive.
Although I highly recommend a lawyer to assist you, with some simple startups where there wasn’t the funds, we used previously developed shareholders agreement as templates to agree on all the “what if’s” in a clear simple binding agreement.
The analogy I use is that the shareholders agreement is like a boat and that all the shareholders have to be in the boat abiding by the same rules for them to all reach shore together. And with everyone in the same boat, no one is likely to then be peeing in it or creating difficult living conditions as they’ll all be sailing inside the same boat together. So, if you don’t want other shareholders peeing in your boat use a shareholders agreement.
If you'd like to learn more about using a shareholders agreement to improve your business success I welcome you to contact me at the email address or phone number below.
Written By Rob Pilz © Copyright December 23, 2013 Rev. March 21, 2015 Revelation Business Solutions Ltd.
About Rob Pilz
A senior executive, including former CFO, of public and private companies, I have more than 20 years experience building, optimizing and financing businesses ranging from Fortune 500‘s to Delloite’s Technology Fast 50TM. With a talent for bringing out the best in leaders and an expertise in creating leverage, my current passion is building a network of highly conscious leaders generating a virtuous cycle of positive change and wealth. I am constantly looking for ways to improve the odds of business success and have developed a process combining mind, heart and gut to make better faster decisions that I call Zero Point Decision MakingTM. I welcome your questions or comments to my email address at rob@robpilz.com or phone 646-480-0507.
Related Reading
I’d like to share with you this well written and comprehensive 3 part series of articles on shareholders agreements written by business lawyer Cliff Ennico. If you are forming a new business with shareholders or other partners I highly recommend you read his articles. He has additional articles on this same Creators.com website that you might also find useful.
