Imagine you’re at the start of a new relationship. Things are going superbly. Life is exciting and positive. Ticketyboo even. ! Well done you.
So NOW, why not sit down with your partner to discuss what you should do in the future if one of you runs off with someone else, OR if one of you drains the bank account to fund their secret gambling addition, OR you discover your new partner is still in another relationship, OR your partner doesn’t own the flat he/she led you to believe… What, you don’t want to?
BUT that is exactly what we try to do with new business relationships. We are told to envisage everything that could go wrong at the start (fraud, talent or idea theft etc) and try to write down what will happen for each scenario. Not exciting. Not positive. AND – not really possible. Common wisdom dictates that shareholders’ agreements are a necessity for new and fast-growing companies. Here at TandonHildebrand we apply uncommon wisdom.
Why do I think you are wasting your time (and money) on this document?
You are very tight on funds- why waste money on a shareholders’ agreement?
You are feeling positive- why think about negatives? …That MAY NEVER HAPPEN?
You will likely need more money so new investors will demand their own things – requiring a new document
Unless your company has invented Crystal balls, you will not legislate for what really will happen making the document useless
People behave more reasonably when they are forced to negotiate and agree rather than point to clauses in documents that are open to interpretation (no-one wins with litigation).
If you ARE considering a shareholders’ agreement, I am not saying DON’T do it, just that you shouldn’t take it as a given that YOU HAVE TO HAVE ONE. If in doubt, give me a ring and I will share my uncommon wisdom with you.
Richard Hildebrand, Founder
07775 625992
