A shareholders’ agreement is not a requirement in Texas, but it is a good idea. This document can help forego future issues by outlining specific details about the relationship between the shareholders and the company. It also allows each party to have some control over the situation. The shareholders get a say in how the company is run and also get in writing what their rights are. According to Business.com, a shareholders’ agreement can also detail how to handle issues and reduces the power of one side to make decisions.
What shareholders include in an agreement is really dependent upon the situation. However, there are certain things that almost always need to be in it. For example, it should outline how a person may get rid of their shares. It should also include details on handling the removal of directors, the extent of control the directors have and how to resolve disputes among shareholders. Shareholders also want to have a clause that explains the introduction of new shares and how that is handled. Finally, the shareholders’ agreement should include a business plan as well.
The main element of a good shareholders’ agreement is having everyone sign it. Under Texas law, according to the Texas Constitution and Statutes, every shareholder must sign the agreement for it to be valid because this indicates approval and agreement to the terms and conditions of the document. The law also says the agreement needs to have a statement about how long it is valid. This information is for education only. It is not given as legal advice.