However, some issues that must be voted on by shareholders cannot be voted on at “secret” meetings where certain shareholders have been excluded. Difficulties may also arise when the shareholders` agreement contains a very long list of issues requiring special agreement by the board of directors or shareholders, or when it sets acceptable dollar thresholds at the beginning of the activity, but which become too low to be practicable over time. In practice, it is likely that the prescribed processes are neglected or that the company is blocked by a complicated decision-making process. None of these outcomes will contribute to good governance or a productive business relationship. Many disputes between trading partners result from innocent communication errors. The parties might all have good intentions, but might not understand the terms of the agreement. For example, there could be a misunderstanding about who should perform a certain type of work for the company or how shareholders will be compensated for the work they do. You can explain the contribution that each shareholder must make – services, money, intellectual property (whatever they have promised to provide) and what will happen if they abandon the business. This is how you write a shareholders` agreement – If you are doing business with a co-founder, investor or silent partner and you are using a corporate structure, you need a shareholders` agreement.
a shareholders` agreement defines how the company is to be managed; what is the relationship between shareholders; and protects the investments of these shareholders in the company. For the sake of simplicity, this Article applies only to shareholder agreements, but the problems described apply to any type of joint activity, including joint ventures or partnerships. . . .