California Close Corporation Shareholder Agreement Sample: Everything You Need to Know
In California, a close corporation is a type of corporation that has a limited number of shareholders and is not publicly traded. The shareholders of a close corporation have more control over the company`s management and operations than the shareholders of a regular corporation. However, with that control comes responsibility, and it`s important to have a shareholder agreement in place to clarify each shareholder`s rights and responsibilities. This article will provide you with a California close corporation shareholder agreement sample to help you get started.
What is a Shareholder Agreement?
A shareholder agreement is a legal document that outlines the rights and responsibilities of the shareholders in a corporation. It specifies how the company will be operated and how decisions will be made. The agreement can cover a wide range of topics, including:
– The roles and responsibilities of the shareholders
– The management structure of the company
– Voting rights
– Dividend distributions
– How ownership interests can be bought or sold
– The process for resolving disputes
Why is a Shareholder Agreement Important for a California Close Corporation?
A shareholder agreement is particularly important for a California close corporation because of the limited number of shareholders involved. With fewer shareholders, there is a greater chance of disagreements arising that could disrupt the company`s operations. A shareholder agreement can help mitigate these risks by ensuring that everyone is on the same page from the start. It can also provide guidance for resolving disputes when they do occur.
California Close Corporation Shareholder Agreement Sample
Here is a California close corporation shareholder agreement sample to help you get started:
1. Purpose: This agreement outlines the rights and responsibilities of the shareholders of [company name] (the „Company“).
2. Shareholders: The shareholders of the Company are listed below. Each shareholder has an equal ownership interest in the Company:
– [Shareholder name and ownership percentage]
– [Shareholder name and ownership percentage]
– [Shareholder name and ownership percentage]
3. Management: The day-to-day management of the Company will be overseen by a board of directors. The board will consist of [number of directors] directors, who will be elected by the shareholders.
4. Voting: Each shareholder`s voting rights will be proportional to their ownership percentage.
5. Dividends: All profits of the Company will be distributed to the shareholders in proportion to their ownership percentage.
6. Transfer of Ownership: No shareholder may transfer their ownership interest in the Company without first offering to sell it to the other shareholders at fair market value.
7. Dispute Resolution: Any disputes between the shareholders will be resolved through mediation or arbitration.
8. Amendments: This agreement may be amended by a vote of [number of shareholders] of the shareholders.
Conclusion
A shareholder agreement is an important document for any California close corporation. It outlines the rights and responsibilities of the shareholders and provides guidance for resolving disputes. With this California close corporation shareholder agreement sample, you can begin to create a document that meets the unique needs of your company. As always, it`s important to consult with a legal professional to ensure that your agreement complies with California law.