Are pre-packaged Shareholder Agreements useable?

[Noah]

Quick summary : I am sole shareholder and director of a bricks-and-mortar business start-up (i.e. tangible assets and products). I have verbally agreed to sell equity to three other minor investors, in varying amounts and at varying premiums.

I will retain 75% of equity. I have invested a proportion of my own capital as equity, and a proportion as director's loan; the total of my equity capital is a little less than the total to be invested by the minority shareholders (i.e. my premium is a lot less than theirs).

I have made clear that, as a startup, we do not expect to pay any dividends within the first two years. We have tentatively agreed that the minority shareholders will have an option to sell their shares back to me after 5 years at original price + 10% (or similar).

I believe I need a shareholders agreement, as much for the other investors' peace of mind as to reduce the opportunity for misunderstandings and complications down the road.

Due to time as well as budget restrictions, I am considering using one of the pre-packaged Shareholders Agreement forms that are available online for a small fee. I would appreciate any comments from the forum on the advisability of such a solution.

Thanks,

 

[Mick Johnson]

Personally, I'd want something a bit more watertight. As you say:

We have tentatively agreed that the minority shareholders will have an option to sell their shares back to me after 5 years at original price + 10% (or similar).

The 'or similar' bit might be worth a lot of money if all goes well. If it were me, I'd get a professionally drafted contract that states the exact position of all parties. Any ambiguity could cause big headaches as the stakes get higher.

 

[Noah]

The 'or similar' bit might be worth a lot of money if all goes well.

Thanks Mick; have revised this to be co. net worth (assets - liabilities) + 2.5%.

 

[Noah]

Anyone used Companies Registration Online service?