4 Steps to Sorting your Real Estate Agency’s Shareholders’ Agreement with Kristen Porter

O*NO! You have a business partner and know you should put a shareholders’ agreement in place, but have no idea where to start.

If you’ve never had a shareholders’ agreement it might seem like a scary concept, but what if you thought of it as a relationship road map and not a document you will leave in the bottom drawer?

As a road map, here are 4 simple steps to sorting your real estate agency’s shareholders’ agreement.

Plant the seed

Not sure how to start the conversation? Feel awkward raising it? The best way to start the conversation is to frame it around the problem you are solving – that you want to future proof your relationship. Start by saying:

‘Let’s have a chat about future proofing our relationship. We get along so well right now, I’d never want anything to come between us that will stop us growing and making money. Let’s set some time aside next week to nut this out’.

Easy. Done. Book it in!.

Plan the questions

Ok, so you’ve lined up the meeting, but what do you need to talk about? Yes, you’ll want to talk about your fears and aspirations to ensure you are aligned, but there are other serious items you will need to cover to ensure you have a legally unbreakable agency. Here are the big-ticket items for you to nut out that will help you to future proof your relationship:

• Decision making;
• Ownership over time;
• Funding requirements;
• Growth plans;
• How to bring in new shareholders;
• How to exit when you’re ready;
• How to exit a partner if they die or are ‘bad’.

Be organised and plan out the questions. Write them down to guide the conversation. If you want a quick hack, we can give you our shareholders agreement considerations (see below for access).

Sit down

This might sound obvious, but you need to sit down – without any distractions, and sort this out! Go in with your questions to guide the conversation. If you have an advisor that you trust, invite them along so they can ask the tough questions. When we run these sessions with our clients, we have it all done and dusted in an hour. If you are focused, you will come away with a solution and a relationship road map.

Sort it out

At this point, you have talked though the major issues and have agreed on a path forward. You now need to put in on paper. Yes, agreements can be verbal, but then you will end up in a ‘he said, she said’ fight. With your understanding on paper, your road map is clear and in black and white.

Takeaway

To future proof your relationship you need to:

• Have the chat – don’t put it off
• Have a road map to guide the discussion
• Sit down with your advisors to help walk you through it
• Document the relationship

Your next steps

Not sure how to approach the conversation with your business partner, or unsure what needs to go into your shareholders’ agreement? Book a FREE 10 min chat with us today to discuss your options.

Want our cheat sheet so you know what you need to discuss with your partner? Email us ‘SHA’ to [email protected] and we will send you our FREE Shareholders’ Agreement Considerations so you can get started today!

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Boring legal stuff: This article is general information only and cannot be regarded as legal, financial or accounting advice as it does not take into account your personal circumstances. For tailored advice, please contact us. PS – congratulations if you have read this far, you must love legal disclaimers or are a sucker for punishment.

  Article sourced directly from Real Estate Hot Topics Library.