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Shareholders Agreement for WA Businesses
When you launch a business with partners, the initial enthusiasm and strong relationships can sometimes mask potential challenges. Business conditions change, priorities shift and even the best-laid plans can go awry.
A shareholders agreement (or unitholder agreement) is not just a legal formality—it’s a roadmap that defines each party’s rights, responsibilities and dispute resolution processes. This agreement helps ensure that when the inevitable bumps in the road occur, there is clarity about how decisions are made and how to move forward.
The Problem
Without a shareholders agreement, common problems are:
- Ambiguity over profit sharing: How will dividends or profits be allocated?
- Decision-making conflicts: What happens if partners disagree on a major business decision?
- Exit strategies: How do you handle a partner wanting to leave or sell their share?
- Dispute resolution: How will disagreements be managed without jeopardising the business?
Our Solution
At Munro’s, our Perth-based business accountants approach is to utilise their extensive experience to tackle these challenges head-on. We work closely with you to:
- Understand Your Unique Situation: We start by listening to your business goals, current dynamics and potential risks.
- Clarify Roles and Responsibilities: We help outline clear roles for each shareholder or unitholder so everyone understands their part in the business.
- Negotiate Fair Terms: With decades of experience managing complex business structures, we ensure that the terms are balanced and optimised for long‑term success.
- Coordinate with Legal Specialists: While our team manages the process, we collaborate with trusted legal specialists to draft the final document, ensuring that every detail complies with current laws.
Key Benefits & Outcomes
A robust shareholders or unitholder agreement can transform potential conflict into clarity.
- Enhanced Clarity: Every shareholder knows their rights and responsibilities from the outset.
- Improved Dispute Resolution: Clear procedures are in place to resolve disagreements before they escalate.
- Stability in Uncertainty: Even if business conditions change, the agreement provides a stable framework to navigate transitions.
- Optimised Outcomes: By involving Munro’s specialist accountants, you benefit from our extensive experience to ensure that the agreement not only protects all parties but also supports future growth.
Read Key Points & Transcript
Going into Business with Others
video key points
- Partnering in business offers potential ease but also complexity; consider vision alignment, defined roles, and conflict resolution systems.
- Critical to establish a fair shareholder’s agreement and a plan for potential exit scenarios to protect relationships and business integrity.
- Advising on partnerships involves scrutinising agreements for fairness, ensuring your interests are protected.
- An example is discussed where a client is advised against an unfavourable agreement, highlighting the importance of professional advice in safeguarding interests.
- Don’t hesitate to reach out for a preliminary discussion before entering partnerships so that you maximise success chances and protect your interests.
Presented By: Rama Yudhistira
video transcript
Understandably, many people are very excited when they come up with a great business idea and look to go into business with family, friends or someone they met at a networking event.
It’s important in these moments to appreciate that starting a business is not easy. Partnering with someone could make the process easier, but it could also make things more difficult.
We’ve seen family relationships, and friendships, forever ruined because of a business that didn’t go well or there were disagreements in running the business.
This is why you should consider the following key aspects before you go into business with others:
- Do you share the same vision, values and work ethic?
- Do you have clearly defined roles, responsibilities and expectations?
- Do you have a shareholder’s agreement in place? Is the agreement fair?
- Do you have a system to resolve conflicts or disagreements? Do you have a system to ensure that everything is agreed in writing?
- Do you have a plan if one of you want to, or need to, to exit the business?
These are some of the things that you need to consider – it is not an exhaustive list. These may be daunting, but please be assured that we are not here to tell you to only go into business by yourself.
You deserve to have the necessary information to maximise your chances of business success.
Let’s use an example to illustrate how we could protect your best interests.
Mr A approaches a business owner, let’s call him Mr B, to help turn Mr B’s business around. Mr B is a wealthy and successful business owner, but one of his businesses needs help. Mr B offers Mr A an ownership share in his business in exchange for Mr A’s help.
Having received this offer, Mr A asked us for advice. We look into the agreement.
In reviewing the agreement, we find that there was a clause which would enable Mr B to buy back the shares from Mr A, for free, within the defined period of time.
Given in this example, Mr A has sought our advice, the conditions of the agreement are not in our client’s best interests, so we advise Mr A accordingly.
Mr A takes on this advice, discusses it with Mr B, and depending on how you want this example to end, it either results in Mr A getting a fair outcome, or saves Mr A from a disappointing end to his hard work in restoring Mr B’s business back to glory.
We help clients to be wary of going into business with others, but always with the objective of helping them make it work for their interests, as the first priority, and then for all involved too.
If you’re thinking of going into business with others, please don’t hesitate to reach out and book a Get to Know Each Other meeting. We can then discuss how we can help you to ensure that you are protected, and not getting disadvantaged, when going into business with others.
Frequently Asked Questions for Shareholders Agreements
- How does a shareholders agreement protect my business?
It provides a clear framework for handling disagreements and unexpected changes, ensuring that all parties know their roles and how to proceed in various scenarios—thus protecting the business’s stability. - How do Munro’s business accountants help with drafting the agreement?
Our specialist accountants manage the process—from identifying key issues and negotiating terms to coordinating with legal specialists for drafting. We ensure the final agreement is optimised for all stakeholders. - Can a shareholders agreement prevent disputes among business owners?
While no document can entirely eliminate disputes, a well‑drafted agreement sets clear procedures for resolution and helps minimise conflicts, ensuring smoother operations when challenges arise. - How does a shareholders agreement benefit long‑term business growth?
By clarifying roles and responsibilities, it reduces uncertainty and builds trust among partners, which is essential for making confident business decisions and planning for future growth. - Why should I choose Munro’s for advice and assistance?
With over 100 five‑star Google reviews showcasing our high-quality service, you can see our approach is not only thorough but also client‑focused and personalised. - Are your services available Australia‑wide?
While Munro’s is based in Perth, our accounting and advisory services are available whether you are in WA or further across Australia. - What is the cost of drafting a shareholders agreement?
Our pricing is transparent and reflects the complexity of your needs. Please refer to our pricing page and contact us for a personalised quote. - How do I get started with drafting a shareholders agreement?
Simply book a free Get To Know Each Other meeting with us. We’ll discuss your business needs and goals, and then work towards a customised shareholders agreement.
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