Shareholder Agreement Checklist / JV Agreement Checklist

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Our Brisbane Commercial lawyers regularly advise on Shareholder Agreements and JV Agreements and prepare them for clients.

Shareholder Agreement Checklist / JV Agreement Checklist

Objectives of Venture
Nature of Business

  • Start-up?
  • Continuation?

 

Location

  • Limits?

 

Intended expansion
Registered Office
Has a Business Plan been prepared that can be annexed?  If not, is there a requirement for one?
Seller’s pre-completion conduct
Name
Name of the venture
Is a separate business name required?
Asset Contributions 
What is each venturer contributing?
 
Assets from ______________

  • Hard Assets
  • IP
  • Other soft assets (eg. databases)
  • Employees
  • Agreements (consider consents required)
  • Facilities

 

Date to be provided by
Warranties they come with
Due Diligence required on these assets?
Tax and Stamp Duty considerations
Value

  • How is venturer compensated?

 

Assets from ______________

  • Hard Assets
  • IP
  • Other soft assets (eg. databases)
  • Employees
  • Agreements (consider consents required)
  • Facilities

 

Date to be provided by 
Warranties they come with
Due Diligence required on these assets?
Tax and Stamp Duty considerations
Value

  • How is venturer compensated?

 

Funding
Funding to date:

  • Who?
  • When?
  • Amount?
  • Nature?
  • If loans – terms of loans?
  • Purpose

 

Future funding:

  • Who?
  • When?
  • Amount?
  • Nature?
  • If loans – terms of loans?
  • Purpose

 

Consequences if agreed funding not provided when promised?
Agreed budget & cash flow?
Funding beyond budget:

  • Who?

 

Security & Liability
Security to be provided for any funding requirement – current and future?
Who is to put up personal guarantees?
Shareholding
Class/es of shares & rights
Initial Shareholders

  • Number of shares

 

Further capital raising(s):

  • First offered inside in the same proportions
  • Then ability to go outside on not more favourable terms

 

Share Options
General meeting requirements?

  • What decisions have to be joint decisions?

 

Board
Who are to be the board members?

  • Can they appoint alternates?

 

Number on the Board:

  • Min
  • Max

 

Scope of duties of Chair-person and “professionally qualified” board members
What shareholding entitles the holder to make a Board appointment?
Company Secretary?
Company Public Officer?
Frequency and place of Board meetings?
Chairperson?
Quorum?
What decisions have to be joint decisions?
Voting :

  • Does the chairperson have a casting vote?
  • Voting where there is an interest?

 

Director indemnities

  • Insurance

 

Management & Reporting
Scope of delegation to Manager?
Cheque signing authorities
Day to day running
Operational expenditure limits
Hiring & firing
Capital expenditure limits
What decisions have to be joint decisions?
Budgets & reporting:

  • Frequency
  • Scope
  • Who prepares?

 

Performance indicators
Accounting / Accountant for the venture
Audit required?
Shareholder ability to inspect & request additional information
Dividend Policy
At the discretion of the Directors or a pre-determined policy?
Tax Issues?
Involvement of Key Persons
Employment Contracts for key employees.  Consider the terms of employment including hours, pay, leave, travel expenses
Sickness

  • How long do wages continue?
  • Insurance cover

 

Non-venture activities of key persons (any limits for similar or other businesses)
Death or incapacity of key persons – is this to trigger a sell down? / How is this to be funded?
Special duties?
Secondment of Venturer staff?
Shareholder exit
In what circumstances can a shareholder be forced out by another?
How are shares valued?
Pre-emptive Rights – shares first offered inside and then not on more favourable terms outside
Lock-in time limits?
Rights of re-structure for a shareholder (transferring within their group)
Non-Competition on shareholder exit
Restrictions
Term
Area
Material Contacts
Contacts that the JV Company is to enter into
Deadlock Breaking
Termination

 

NOTE: Need for specific legal advice

This check-list is not legal advice but simply to provide a tool to aid in preparation, negotiations, delegation and document preparation.

Need a Shareholders Agreement?

Our Brisbane Commercial Lawyers will provide a fixed fee quote to prepare one for you.