Entrepreneurs are often so busy starting a business that they neglect a decisive step in the process of safeguarding and protecting the future success of their business and their interests – a shareholder contract or a partnership contract. This is the key document that describes the relationship between shareholders (owners) and directors of the company, and that is what they will refer to when making important decisions about the company. Ideally, such agreements are better prepared in the “Honeymoon” period at the beginning of the business, such as a “Business Pre-nup”. At this stage, it is possible to conduct constructive and practical discussions and to reach a consensus more easily on how the business should be managed, while all parties involved are motivated and glued and disagreements or disputes over current activity are not yet pending. The critical need for such agreements to protect your interests is very obvious if: a duly developed shareholder pact can minimize conflicts and maximize the chances of growth; It can even ensure that you can sell the business if you wish (or vice versa, prevent the company from being out of stock among you). As a business owner or shareholder, one of the reasons why a shareholder contract is so important, otherwise the constitutional decision-making power is probably within the board of directors (where one can quickly be inferior and lose majority/control). A shareholder pact provides a roadmap for the company`s life cycle from start to finish. It can reduce costs and uncertainties in the event of a “business resolution” or litigation. Each company is different and therefore any shareholder or partner relationship. A “unanimous shareholders` pact” is an instrument that allows shareholders to assume the powers, obligations and liabilities of directors, either in general, for certain legal acts or even for a specified period of time. This completely new and practical concept is commonly referred to as the USA. A United States can be used to protect directors from personal liability in appropriate situations. In this way, the Corporations Act recognizes by law that liability should be consistent with authority.

To the extent that the Corporations Act authorizes the power to delegate the decisions of the directors` company to shareholders, it provides for accountability for the transfer of the consequences of those decisions, including from directors to shareholders. For one-person companies (now authorized by the Companies Act), a corresponding written statement from the sole shareholder is considered a United States. It is not easy to remove a director or shareholder, so make sure you understand your rights and obligations before giving someone decision-making power or a financial ownership interest in your business. This removal requires a careful review of the terms of the Constitution and the shareholder contract, the Corporations Act and any other applicable appointment or employment agreement to determine who has the right to appoint directors and the circumstances under which they may be withdrawn (and when shareholders may be withdrawn or share repurchased and at what price). It is important to note that the mere fact that a “unanimous shareholder pact” is applied to protect directors from possible liability does not mean that the solvency requirements of the law should be ignored.