Business Partnerships & Shareholders

Shareholder Agreements

A Shareholder Agreement documents the relationship between the owners of a company, including their rights, responsibilities and the way important business decisions are made.

While a company may have a constitution, a Shareholder Agreement can address additional commercial arrangements between shareholders.

Common provisions include:

• Share ownership and financial contributions.
• Management responsibilities and voting rights.
• Profit distributions and dividend arrangements.
• Additional funding requirements.
• Restrictions on transferring or selling shares.
• Resolving deadlocks between shareholders.
• What happens if a shareholder leaves, dies or becomes incapacitated.
• Valuation methods and exit arrangements.

Rise Legal prepares and reviews Shareholder Agreements tailored to the ownership structure and commercial objectives of your business.

Partnership Agreements

Going into business with another person can be a significant commitment. A written Partnership Agreement helps establish expectations before disagreements or changes in circumstances arise.

A Partnership Agreement can document how the business operates, how income and losses are shared, and what each partner is expected to contribute.

Important matters include:

• Initial financial and non-financial contributions.
• Profit and loss sharing arrangements.
• Roles and management responsibilities.
• Decision-making authority.
• Ownership of business assets and intellectual property.
• Admission of new partners.
• Retirement, withdrawal and exit provisions.
• Arrangements for ending the partnership.

The legal obligations of partners can differ from those of shareholders in a company. A written agreement should reflect the actual business structure and applicable laws.

Unit Holder Agreements

Where a business or investment arrangement operates through a unit trust, a Unit Holder Agreement can help document the relationship between the unit holders.

These agreements may address voting rights, funding obligations, transfers of units, valuation arrangements and how decisions are made.

Unit Holder Agreements should be considered alongside the trust deed and other relevant legal documents so the arrangements operate consistently.

Rise Legal can assist with preparing and reviewing agreements between unit holders, subject to the structure and requirements of the arrangement.

Buy-Sell Agreements and Business Succession

What happens to a business if one of its owners retires, dies, becomes permanently incapacitated or wishes to leave?

A Buy-Sell Agreement can establish arrangements for transferring an owner’s interest when specified events occur.

Depending on the circumstances, the agreement may address:

• Events that trigger a sale or transfer.
• Who has the right or obligation to purchase an interest.
• How the interest will be valued.
• Payment arrangements and timeframes.
• Funding and insurance-related considerations.
• Responsibilities of remaining business owners.

Buy-Sell Agreements should be considered alongside appropriate business succession, taxation, insurance and estate planning advice.

Why Are Agreements Between Business Owners Important?

Business relationships often begin with shared goals and a common understanding of how the business should operate.

However, circumstances can change as a business grows, new owners join or existing owners decide to leave.

A carefully prepared agreement can help address important questions before they become problems:

• Who has authority to make major business decisions?
• What happens if owners disagree?
• Can an owner sell their interest to someone else?
• What happens when additional funding is needed?
• How are profits distributed?
• What happens if an owner leaves the business?
• How is the business valued when ownership changes?

Documenting these arrangements helps give business owners a clearer framework for managing their relationship and making commercial decisions.

For more information, read our guide to Partnership and Shareholder Agreements in Australia.

Frequently Asked Questions

Do I need a Shareholder Agreement if my company has a constitution?

A company constitution and a Shareholder Agreement serve different purposes. A Shareholder Agreement can document additional arrangements between owners, including voting rights, funding, share transfers and exit provisions.

Is a written Partnership Agreement legally required?

Not every partnership is required to have a formal written agreement. However, having one is strongly recommended because it documents the partners’ agreed rights, responsibilities and commercial arrangements.

When should we prepare a Shareholder Agreement?

Ideally, a Shareholder Agreement should be considered when a company is established or when new shareholders join. Existing companies can also benefit from reviewing or introducing an agreement as ownership arrangements change.

What happens if business partners disagree?

The available options depend on the business structure, existing agreements and circumstances. Agreements can include procedures for addressing disagreements and deadlocks before they interfere with the operation of the business.

Can a Shareholder Agreement be updated?

Yes. Shareholders may agree to amend their arrangements, subject to the requirements of the existing agreement, the company’s constitution and applicable law.

Does Rise Legal offer fixed fees?

Yes. Rise Legal offers fixed-fee legal services for preparing and reviewing business ownership agreements, with the agreed scope and cost confirmed upfront.

Speak with Our Partnership and Shareholder Agreement Lawyers

Starting a business with a partner, bringing in shareholders or reviewing an existing ownership arrangement? Rise Legal can help you document the relationship and understand your legal obligations.

Our business lawyers assist clients on the Gold Coast, in Perth and Sydney, and across Australia.

Call 1300 064 707 or contact Rise Legal to book a free initial discovery call.

Disclaimer: The information provided on this page is general in nature and is intended for informational purposes only. It does not constitute legal advice and should not be relied upon as a substitute for advice tailored to your specific circumstances. We recommend seeking independent legal advice before making any decisions based on this information.