Business Start-up Agreement

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15 essential questions for a Business Start-up Agreement  

By Neil Butler , Solicitor, Thurles

You and some colleagues have come up with a great idea for a Business Start-up, right?

You’ve spent hours planning and refining it and are almost ready  to launch, yes?

Have you thought about a Business Start-up Agreement?

Consider these questions:-

  1. Is it to be a Company? Understand why a Company might suit – look at my note here for further info
  2. Who gets what percentage of the company or business shares?
  3. Is the share ownership  based on money introduced?
  4. What assets or cash does each Subscriber contribute or invest?
  5. Does the number of shares held by people increase  based on continued participation in the business over a stated period of time?
  6. What are the roles and responsibilities of the each of you and your colleagues as Subscribers?
  7. If one Subscriber leaves or dies, does the Company or the other Subscribers have the right to buy back that person’s shares? At what price?
  8. How much time commitment to the business is expected of each Subscriber?
  9. What roles are filled by whom?
  10. What salaries (if any), are the people entitled to?
  11. How are decisions of the business to be made? (majority vote, unanimous vote, or certain decisions solely in the hands of one person doing the day to day operation?)
  12. Under what circumstances can a Subscriber be removed as an employee of the business? (usually, this would be a Board decision)
  13. How will a sale of the business be decided, should such an opportunity arise?
  14. What happens if one Subscriber is’nt doing what was promised under the Shareholder’s agreement? How is it resolved?
  15. Are there to be Bank Borrowings – what security is to be provided and what personal risk attaches for each Subscriber?


Don’t leave these things on the long finger – ask for our help today and let’s clear your thinking!

 

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