When you decide to form a business with others, you will need to take steps to define your respective roles and responsibilities. When your chosen entity is a corporation, having a Florida shareholder agreement is imperative. Here is more on what you need to know about Florida shareholder agreements:
What is a Florida Shareholder Agreement?
A Florida shareholder agreement is a contract between shareholders and investors specifying how a corporation will be governed and operated. Shareholder agreements generally include terms related to shareholder obligations, conflict of interest, corporate management, transferring shares, and dispute resolution.
Types of Shareholder Agreements
In Florida, there are voting and standard shareholder agreements.
Voting Agreements—shareholder voting agreements provide for the manner in which shareholders will vote their shares by signing an agreement for that purpose. These agreements are enforceable and transferable by law.
Standard Shareholder Agreements—Under Florida law, shareholders can create an agreement that addresses specific terms. Shareholder agreements can:
- Eliminate the board of directors or limit or restrict the discretion or powers of the board of directors;
- Govern the authorization or making of distributions regardless of whether they are in proportion to the ownership of shares;
- Establish who will be directors or officers of the corporation or their terms of office or manner of selection or removal;
- Govern, in general, or regarding specific matters, the exercise or division of voting power by the shareholders and directors or among any of them, including the use of weighted voting rights or director proxies;
- Establish the terms and conditions of any agreement for the transfer or use of property or the provision of services between the corporation and any shareholder, director, officer, or employee of the corporation or among any of them;
- Transfer to any shareholder or other person any authority to exercise the corporate powers or to manage the business and affairs of the corporation, including the resolution of any issue about which there exists a deadlock among directors or shareholders;
- Require dissolution of the corporation at the request of one or more of the shareholders or upon the occurrence of a specified event or contingency;
- Impose liability on a shareholder for the attorney fees or expenses of the corporation or any other party in connection with an internal corporate claim;
- Establish, including instead of judicial dissolution, a mechanism for breaking a deadlock among the directors or shareholders of the corporation; or
- Otherwise, govern the exercise of the corporate powers or the management of the business and affairs of the corporation or the relationship between the shareholders, the directors, and the corporation, or among any of them, and is not contrary to public policy.
Shareholder agreements must be set forth or referenced in the articles of incorporation or bylaws. They must also be stated in a written agreement that is signed by all persons who are shareholders at the time of the agreement, and such written agreement is made known to the corporation. Unless the agreement provides otherwise, shareholder agreements will be subject to termination or amendment only by all persons who are shareholders at the time of the termination or amendment.
Florida shareholder agreements can have significant implications for shareholders and the corporation. Without one, an entity would be subject to the provisions of the Florida Business Corporations Act.
If you intend to have a shareholder agreement in place, you should consult with an experienced Florida business attorney. Your business attorney can help you understand your agreement terms and draft language that supports the entity’s success and protects your best interest.
Contact an Experienced Florida Business Lawyer
Attorney Richard Sierra at the Florida Small Business Legal Center assists clients like you with commercial leasing, business, and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.