Unanimous Shareholder Agreement Template

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A Unanimous Shareholder Agreement (USA) is a legally binding contract between all shareholders of a company. It outlines the terms and conditions governing the relationship between the shareholders, the company, and its management. This agreement is particularly crucial for closely-held companies where shareholders have a significant influence over the company’s operations and decision-making processes.

Key Elements of a Unanimous Shareholder Agreement

A well-drafted USA typically includes the following essential elements:

1. Shareholder Information

Identification of Shareholders: Clearly identify each shareholder, including their full legal name, address, and contact information.

  • Share Ownership: Specify the number of shares owned by each shareholder and the percentage of ownership in the company.

    • 2. Voting Rights and Procedures

    Unanimous Consent: Outline the requirement for unanimous consent on all major corporate decisions, such as:

  • Election of directors
  • Amendments to the company’s bylaws
  • Mergers and acquisitions
  • Significant financial transactions
  • Voting Proxies: Establish procedures for appointing proxies to vote on behalf of shareholders who cannot attend meetings.

    • 3. Share Transfer Restrictions

    Right of First Refusal: Grant shareholders the right to purchase shares that another shareholder intends to sell, before offering them to outside parties.

  • Buy-Sell Agreements: Implement provisions for the orderly transfer of shares upon a shareholder’s death, disability, or departure from the company.
  • Tag-Along and Drag-Along Rights: Define the rights of shareholders to participate in future financing rounds or sales of the company.

    • 4. Dispute Resolution

    Mediation and Arbitration: Specify the preferred methods for resolving disputes between shareholders, such as mediation or arbitration.

  • Governing Law: Clearly state the jurisdiction whose laws will govern the agreement.

    • 5. Deadlock Resolution

  • Deadlock Procedures: Establish mechanisms for resolving deadlocks, such as appointing an independent arbitrator or using a tie-breaking procedure.

    • 6. Management and Control

    Board of Directors: Outline the composition and responsibilities of the board of directors, including the number of directors, their qualifications, and their term of office.

  • Officer Roles and Responsibilities: Define the roles and responsibilities of the company’s officers, such as the CEO, CFO, and COO.

    • 7. Financial Matters

    Dividend Policy: Establish guidelines for the distribution of dividends to shareholders.

  • Capital Contributions: Specify the amount of capital that each shareholder is obligated to contribute to the company.

    • 8. Confidentiality and Non-Compete

    Confidentiality Obligations: Impose confidentiality obligations on shareholders to protect the company’s proprietary information.

  • Non-Compete Clauses: Restrict shareholders from engaging in competing businesses or activities that could harm the company.

    • 9. Indemnification

  • Indemnification Rights: Outline the circumstances under which shareholders may be indemnified for liabilities incurred in connection with their roles in the company.

    • 10. Termination and Amendment

    Termination Events: Specify the events that may trigger the termination of the agreement, such as a merger, dissolution, or bankruptcy.

  • Amendment Procedures: Establish the process for amending the agreement, typically requiring unanimous consent.

    • Designing a Professional Unanimous Shareholder Agreement

    To create a professional and legally sound USA, consider the following design elements:

    Clear and Concise Language: Use clear and concise language to avoid ambiguity and potential disputes.

  • Logical Organization: Organize the agreement in a logical and easy-to-follow manner, using headings and subheadings to separate different sections.
  • Consistent Formatting: Maintain consistent formatting throughout the document, including font, font size, line spacing, and margin.
  • Professional Typography: Choose a clean and professional font, such as Times New Roman or Arial.
  • White Space: Use white space effectively to improve readability and make the document visually appealing.
  • Legal Review: Consult with an experienced attorney to ensure that the agreement complies with all applicable laws and regulations.

    • By carefully considering these elements, you can create a Unanimous Shareholder Agreement that protects the interests of all shareholders and sets a strong foundation for your company’s future.