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:-
- Is it to be a Company? Understand why a Company might suit – look at my note here for further info
- Who gets what percentage of the company or business shares?
- Is the share ownership based on money introduced?
- What assets or cash does each Subscriber contribute or invest?
- Does the number of shares held by people increase based on continued participation in the business over a stated period of time?
- What are the roles and responsibilities of the each of you and your colleagues as Subscribers?
- 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?
- How much time commitment to the business is expected of each Subscriber?
- What roles are filled by whom?
- What salaries (if any), are the people entitled to?
- 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?)
- Under what circumstances can a Subscriber be removed as an employee of the business? (usually, this would be a Board decision)
- How will a sale of the business be decided, should such an opportunity arise?
- What happens if one Subscriber is’nt doing what was promised under the Shareholder’s agreement? How is it resolved?
- 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!