There are two golden rules when bringing an additional partner or shareholder into an existing business.
Golden rule 1: Understand what value the partner or shareholder is bringing to the business. Is it specialist expertise, an entry point into a new business line, strategic opportunities, funding… or all of these?
Golden rule 2: Understand the motivations and intentions of the new partner or shareholder – now and moving forward. It may help to seek some advisory or facilitation services to tease out and clarify these motivations.
As we wrote in our free ebook, Stakeholders in your business, business partnerships can be very positive if planned, structured and managed effectively to ensure a shared vision and direction.
Establishing the shareholding
Once those 'golden rules' are covered off, there are two other key issues to consider when taking on a new partner or shareholder:
- How to establish the shareholding for the incoming investor, and
- How to manage the shareholder relationships.
The following infographic sets out some of the questions you need to consider to ensure your agreement is well thought out and the shareholder relationships are well managed.
The issues listed on the right should, ideally, be addressed as part of the drafting of a legally binding Shareholders’ Agreement.
The JPAbusiness team often provides support for clients to work through these issues and helps set the right basis for partner relationships, including:
- facilitating open planning discussions between parties, and
- drafting Shareholders’ Agreements.
If you would like advice about any business partnership issues, please contact the JPAbusiness team on 02 6360 0360 or 02 9893 1803 for a confidential, obligation-free discussion.
