Who Should Draft Shareholder Agreement

When starting a business, it`s important to establish a clear set of rules and guidelines for how the company will be governed and operated. This is where a shareholder agreement comes in – a legal document that outlines the rights and responsibilities of the shareholders, as well as the procedures for how important decisions will be made within the company.

But who should be responsible for drafting this important document? Should it be left to the lawyers or the business owners themselves? Let`s take a closer look.


Many business owners choose to enlist the help of a lawyer when drafting a shareholder agreement. This is because lawyers have specific expertise in legal language and can ensure that the document is legally valid and binding. They can also help to ensure that the document is comprehensive and covers all necessary areas of the business.

However, it`s important to note that lawyers can be expensive to hire, and their fees can quickly add up. Additionally, lawyers may not have the same level of insight into the day-to-day operations of the business as the owners themselves, which could lead to important issues being overlooked.

Business Owners

Some business owners choose to draft their own shareholder agreements, either alone or with the help of a template or guidebook. This approach can be cost-effective and allows owners to tailor the document to their specific needs and circumstances. Additionally, owners may have a better understanding of the unique dynamics of their business, which can inform the content of the agreement.

However, it`s important to note that owners may lack the legal expertise necessary to draft a comprehensive and legally valid shareholder agreement. Making mistakes or overlooking important details could lead to costly legal disputes down the line.

The Ideal Approach

Ideally, the drafting of a shareholder agreement should be a collaborative process between the business owners and their legal counsel. This allows owners to provide insight into the particularities of their business while ensuring the document is legally valid and comprehensive.

Ultimately, the decision of who should draft a shareholder agreement will depend on the specific needs and circumstances of the business. Regardless of who drafts the document, it`s important to ensure that all parties involved have a clear understanding of its contents and implications. This will help to prevent misunderstandings and legal disputes down the line.

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