As a business owner, you may decide to bring in investors to help finance your company`s growth. If you do, creating a shareholders agreement is essential to ensure that all parties are on the same page and understand the terms of the investment.

Here are some key steps to prepare a shareholders agreement:

1. Identify key issues:

Before beginning to draft a shareholders agreement, identify the key issues that need to be addressed. These may include the rights and responsibilities of shareholders, the decision-making process for major company decisions, the process for issuing additional shares, and the process for resolving disputes.

2. Draft the agreement:

Once you have identified the key issues, work with an attorney to draft the shareholders agreement. The agreement should be clear and comprehensive, outlining all pertinent details and conditions.

3. Define shareholder rights and responsibilities:

The shareholders agreement should outline the rights and responsibilities of each shareholder. This includes voting rights, dividend entitlements, and any other benefits or obligations that come with being a shareholder.

4. Determine the decision-making process:

The shareholders agreement should establish a clear method for making major company decisions. This may involve requiring a certain percentage of shareholders to approve a decision, or delegating decision-making authority to a specific group or individual.

5. Establish procedures for issuing additional shares:

If the company decides to issue additional shares, the shareholders agreement should outline the procedure for doing so. This may involve specifying the circumstances under which new shares can be issued, as well as the process for determining the issuance price.

6. Address dispute resolution:

Inevitably, disagreements may arise between shareholders. The shareholders agreement should establish a clear process for resolving disputes, such as mediation or arbitration.

7. Review and update regularly:

Lastly, it`s important to regularly review and update the shareholders agreement as necessary. This may involve making changes based on changes in the business or in the investment structure.

In conclusion, creating a shareholders agreement is a vital step in the process of bringing on investors. By taking a thoughtful and comprehensive approach, you can establish clear expectations and avoid misunderstandings down the line.