Drafting shareholder agreements for co-founded startups

Law firm Veat received a request to draft a shareholders’ agreement for Startup A (hereinafter referred to as “the client”) which is a jointly-founded startup.

The client requested legal advice to define the clear equity structure and division of roles among the founding members and to reconcile the interests of the shareholders.

Law firm Veat drafted a shareholders’ agreement incorporating the content needed by the client, ensuring that the jointly-founded members can foster a sense of ownership of the company's shares by holding shares, and stipulated penalties for violation of obligations in the shareholders’ agreement to give the agreement legal binding force.

Advantages of a Shareholders’ Agreement

A shareholders’ agreement is a contract defining the rights and obligations of shareholders who hold shares in the company. A shareholders’ agreement plays a crucial role in clarifying the company’s governance structure, preventing disputes among shareholders, and securing the stability of the company's operation.

It has the advantage of restricting the free transfer of shares by stipulating methods such as granting a right of first refusal to existing shareholders when a shareholder transfers their shares to others, protecting management rights, and stipulating approval procedures for shareholder meetings or the board of directors for major decision-making matters, ensuring a transparent decision-making process.

In addition, it can clearly define matters relating to the payment of dividends, clearly define the obligations and responsibilities of the shareholder to the company, and secure the consistency of the company's operation.

To clearly define the equity structure and division of roles among the founding members and meticulously reconcile the interests of the shareholders, you should discuss with a legal advisor with abundant experience in startup consulting to prevent shareholder disputes and increase the stability of the company's operation.

Law firm Veat has successfully supported numerous startups from the early stages, and is providing the client with the optimal legal solutions based on the know-how accumulated through this experience.

Law firm Veat, which has grown with hundreds of companies, from Unicorn to Decacorn, will help you resolve various legal issues and pave the way for growth.

Thank you.
Sincerely, Law firm Veat