Generic selectors
Exact matches only
Search in title
Search in content
Search Products
Filter by Categories
B-BBEE
Blog
Company Secretarial
Featured
General Business
General Interest
Investing in Property
Marketing
Personal Growth
Personal Wealth
Tax
Trusts and Estate Planning
Uncategorized

I’m often asked to prepare a shareholders’ agreement. Why? Because there’s a perception that it is one of the things that you ought to do. Not in my view!

Ask yourself these questions –

1) Will I ever understand all that legal jargon that makes up a Shareholders’ agreement and builds it to an impressive 5mm thick document?

2) What will I do with it when we have a bust up? Will I take my previous co-shareholder to court? Not if you’ve got any sense.

3) What do I really want?

In my entire business life I have never signed a shareholders’ agreement and have never regretted not having done so. All of my partnerships and co-shareholdings have been defined by a Memorandum of Understanding, the so-called MOU.

So what is an MOU? It is a one or two page, informal document, written by the parties that simply states what they have agreed. It is then signed and dated by the parties. Everybody now knows where they stand, they can all understand it, they can easily change it if they missed something out or if circumstances make a change desireable. And, it would almost certainly stand up in court (if you really wanted to go there) better than a Shareholders’ agreement, because of its clarity of expression and no wrangling over the exact meaning of a word or phrase.

If you want help in drawing one up, book a free meeting and come and see me.

0 comments

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Need help with your Trust or Business?

Contact us today or set up a free meeting with our CEO, Derek Springett. We have been offering expert advice and business services since 1971. You can also visit our online store to see our full list of services.

If you enjoyed this article, you may like to subscribe to the monthly round up featuring all of my latest articles. Then check out the two books I have written which have proved to be very popular.

Complete the form below to subscribe to my monthly round up.