My answer to When you incorporate a startup, do you need to have a shareholder agreement and a vesting schedule, if…
Answer by Raad Ahmed:
I can understand why you may think a shareholder agreement and vesting schedule are moot points when you are the only owner. However, I encourage you to not just think about the current state of your business, but where you see it going in the future. Owners expect their businesses to grow and develop over time, and the reality is that at some point in the future you will likely not be the only shareholder in the business.
When/if that happens, you will be kicking yourself for not having an agreement in place. Yes, an attorney can possibly remedy any mistakes that you make, but as others have indicated here—that will not be a money saver. It’s better to do it right the first time.
The main things you want to touch on in a shareholder agreement include:
- Who can buy shares
- When a buyer can purchase shares
- Price of shares
- Futuristic planning for certain events in a shareholders life (death, divorce, bankruptcy, etc.)
Agreements can and should be detailed enough to cover what matters most. An attorney can assist you with completing this critical document.
If cost is your main driving force, then I encourage you to look into the options provided byWe are a marketplace of freelance attorneys that are incredibly skilled in what they do. Because they work for themselves, their costs are much less expensive than typical law firms. We offer affordable, flat rates and flexible payment options. We’ve already helped over 1000 entrepreneurs just like you. We’d love to offer you a free consultation.