Common and recommended shareholder agreement clauses?

searcher profile

August 16, 2024

by a searcher from New York University - Leonard N. Stern School of Business in Grand Rapids, MI, USA

I'm a self-funded searcher with a C corp.

As I look at my shareholder agreement, I'm curious what clauses are common for self-funded searchers?

Are there any you recommend including?

0
7
71
Replies
7
commentor profile
Reply by a professional
from University of Michigan in Detroit, MI, USA
Hi ^redacted‌, shareholder agreements generally cover management of the company, restrictions on the transfer of shares, preemptive rights (if any), covenants (such as non competes), and information rights, among other items. The answer to your question (are there any you recommend including?) comes down to circumstances. Who are the other shareholders? What's the split in ownership percentage? Are there certain situations in which some shareholders are expected to sell their shares? Is the expectation that some shareholders will be bought out in the future by other shareholders? Are the shareholders expected to bring business opportunities to the company? The list could go on. Are you comfortable sharing more about your situation? If so, I'd be happy to add more specific comments? Also, feel free to reach out to me via DM or directly at redacted if you'd like to discuss further.
commentor profile
Reply by a searcher
from New York University in Grand Rapids, MI, USA
I found this, but I'm looking for market normalization in search. What's commonplace? Outliers are fine with context. It's helpful for people to know.

https://www.legalnature.com/guides/articles-of-incorporation-and-shareholder-agreements-whats-the-difference
commentor profile
+5 more replies.
Join the discussion