Corporate Lawyers Sydney

A shareholder agreement is essential when a company has more than one shareholder, especially where founders, investors or family members are involved. It sets out voting rights, exit rules, dispute pathways, dividend policies and processes for selling or issuing new shares. Without one, disagreements can quickly escalate and stall decision-making.

Directors may face personal liability for breaches of duties, insolvent trading, misleading conduct, failing to keep proper records, or not acting in the best interests of the company. ASIC has wide investigative powers, and significant penalties apply, including bans or compensation orders. Good governance and early advice reduce this risk.

Companies must maintain a register of members, share movements, consents, minutes of meetings, financial reports (where required), constitution, and ASIC lodgement records. These documents must be accurate and ready for inspection. Poor record-keeping increases the likelihood of compliance breaches and disputes between shareholders.

Deadlocks can halt business operations and damage value. Depending on the circumstances, solutions may include negotiation, mediation, a buy-sell mechanism in the shareholder agreement, appointment of an independent director, or court intervention. Early legal advice helps resolve disputes before relationships deteriorate further.

A corporate lawyer focuses on governance, structures, compliance, shareholders, directors and company law. A commercial lawyer concentrates on contracts, trading arrangements, leases and other business law matters.

Restructuring is recommended when a business grows, brings in new investors, expands into new markets, protects assets, or prepares for a sale. Signs that restructuring may be needed include tax inefficiencies, unclear ownership rights, governance issues, or new risk exposures. A review helps ensure the structure supports long-term goals.

Investors typically request a shareholder agreement, subscription agreement, company constitution review, cap table verification, and warranties relating to financials and liabilities. They may also seek rights such as board representation, anti-dilution protections and information rights.

Due diligence is a detailed review of the target company’s financials, contracts, compliance, employment matters, intellectual property, litigation history and risks. Buyers use this information to negotiate price, warranties and deal terms.