FREE 10+ Family Shareholders Agreement Samples in MS Word | Google Docs | Apple Pages | PDF

There are a lot of big and small businesses out there that are being run by family members or are family-owned. That would usually extend to the next of kin or to other relatives of the family. And to help maintain the harmonious relationship between each family member and ensure a peaceful transition to the next generation, a family shareholders agreement is an effective document that needs to be signed by each member or shareholders. Creating an agreement can be quite beneficial since this may minimize family-related disputes and regularly revising will help the shareholders learn how to handle their business effectively, be wiser with their decision-making, and more importantly addresses the issue of the distribution of money within the family. To learn more about this, let us discuss this further below. And if you need to start preparing a shareholder’s agreement for your family business, then we’ve got a list of comprehensive family shareholders agreement samples that are available for download on this page.

10+ Family Shareholders Agreement Samples

1. Family Shareholders Agreement Template

2. Family Business Shareholders Agreement

3. Family Shareholders Agreement Checklist

4. Family Shareholders Sale Agreement

5. Family Shareholders Corporations Agreement

6. Family Shareholders Agreement Drafting

7. Basic Family Shareholders Agreement

8. Family Shareholders Buy-Sell Agreement

9. Family Shareholders Securities Agreement

10. Shareholders Agreement Family Protocols

11. Family Shareholders Transfer of Shares Agreement

What Is a Family Shareholders Agreement?

We’ve seen a lot of successful family-owned businesses, with the likes of Versace, Walmart, Volkswagen, BMW, and many more. And one key to their success is the harmonious working relationship of each shareholder. Although we have read too many times about business-related family feuds sometimes resulting in the most unfortunate of circumstances, it is always important to keep in mind when running a family business to separate personal matters from work. And the utmost cooperation and open communication are needed between shareholders if they wish to continue running their business in the long run. A family shareholders agreement is one key document that may help keep things in check. This is a contract between the shareholders of the family-owned business which provides added protection around the ownership and procedures to be taken in relevance to certain important decisions.

How To Create a Family Shareholders Agreement?

When you start a business that involves more than one person who is investing money into the company, then you will be needing a shareholders agreement. And for family businesses, this is very much required as this will describe how the business will be run, how to solve disputes between shareholders, and clarify the responsibilities and benefits of each shareholder. Now a shareholders agreement will have a direct impact on how decisions are made in the company, so this is why it is important. Everyone must be able to work under the guidelines set by the agreement and any modification on the agreement is only allowed when all shareholders agree on such action. To begin creating a family shareholders agreement, you will need to remember the following provisions.

1. Responsibility of Each Shareholder

It is important to point out in the agreement the roles and responsibilities of each shareholder. One of which is establishing a rule on how to appoint each officer and the conditions on how to terminate. The main goal of such is to define expectations, and if any issues should arise in the future the agreement will serve as a reference.

2. Voting Rights

As the company grows, you will need to establish voting right for each shareholder and the type of vote that is required in order to make decisions. Certain decisions would require a 51% in order for the decision to move forward. Whereas other decisions may require 75% votes such as alterations to the company’s memorandum or a change in the company’s name.

3. Valuation of Stocks/Shares

Provisions can be made for share valuations in case the shareholder wants to exit the business. Within the agreement, you need to make certain provisions that restrict certain transfers or sales of stocks or shares. For example, a discount may be offered if a shareholder wishes to sell his or her stock to a fellow family shareholder. The reason such regulations will help the company protect their investment from outside influences, and stop external individuals from becoming shareholders. In family businesses, restrictions on who can purchase or inherit shares are important. To ensure that the business stays within the family, you will need to provide all these requirements in the agreement.

4. Legal Obligations and Financial Responsibilities

It is important to point out the legal obligations of each member of the business and more importantly the financial responsibilities. Determine the amount of money each shareholder must initially invest.

5. Dividends

A shareholders agreement can be used to agree on the dividend policy for shareholders which can be of benefit to ensure continued harmonious relationships among the members.

6. Dispute Resolution

One vital function of this agreement is that it can provide an avenue for resolving any disputes that may arise between the shareholders and ensure that any confidential matters are kept within its members.

7. Exit Strategy

An exit strategy should be part of every shareholder’s agreement should the business close down. It should point out how the shareholders can get their investment back or can selling their shares be an option.

FAQs

Having an effective family shareholders agreement is vital for every family-owned business. It is the foundation on which to build a solid business and will help protect everyone’s interest.