Just like many new business owners overlook contracts and agreements that protect the business and make operations go more smoothly, they also tend to over look essential agreements between stakeholders. Disagreements and disputes between principle stakeholders can incapacitate business operations and could potentially damage the future of the business.
A few examples of these types of agreements are:
Founders Agreement – Is an agreement between business founders that sets expectations for their relationship relative to the business ; what their rights, obligations, responsibilities and obligation are. This document is often outside the business’ governing documents.
Owner’s Agreement – Governs and manages the relationship between owners relative to the business. It is intended to help owners maintain a positive relationship by laying out suitable rules prior to conflicting and unanticipated situations arising.
Shareholder Agreement – Outlines the rights and obligations of a company’s shareholders. This document also outlines how shareholders should be treated as well as safeguards.
Buy / Sell Agreement – Outlines the process for how a stakeholders interest in a business will be reassigned due to a set of predefined trigger events.
Succession Plan – Outlines how a business will prepare for the exit of a founder or key stakeholder.
Depending on the size and scope of your business you may not need to have these agreements in place right away. But, they should be on your to do list to be done in the near future.