The benefits of a shareholder’s agreement may not be fully considered when parties are intending to go into business together and become joint shareholders in a corporation. Perhaps the mood is optimistic and none of the participants anticipate that things might sour between them down the road. Sometimes corporations are formed absent such an agreement. However, among other benefits, these agreements become particularly useful in managing risk and guiding shareholders through governance issues and disputes that may arise, efficiently so as to minimize disruption to the corporation’s business. Absent a shareholder’s agreement, shareholders in a closely held corporation that cannot see eye-to-eye regarding the operation and path of the corporation, may become stuck in a deadlock where decision-making is effectively stifled due to a stalemate between them. Shareholder’s agreements can serve to provide mechanisms to address deadlock, protect the voice and rights of minority shareholders, provide a road map for … Read More