Ownership Agreement

Why you should make an owner agreement?

If you are multiple owners of a business, there are various compelling reasons why you should consider implementing a joint ownership strategy. Firstly, as co-founders, you must have invested substantial resources, both in terms of time and money into the business. Secondly, as the company grows and becomes more profitable, it is vital to have consistency and agreement on how to handle shared ownership including if the business is to be sold in the long term or an owner wishes to sell their ownership interests. It is imperative to consider potential future conflicts that may arise due to differing opinions on business matters. Therefore, having a well-crafted ownership agreement can mitigate the risks of future disputes and provide a structured road map to resolve conflicts. When seeking to create an ownership agreement that suits your particular relationship dynamics, using Legal Desk can provide you with a fully enforceable agreement that meets your unique specifications. Take, for instance, a hypothetical scenario where an ownership agreement could have prevented conflicts and problems.

When to sign an ownership agreement?

It is recommended that you make owner agreement when starting your business. Although there are no specific guidelines on when to do so, having an agreement in place can provide a solid foundation for future cooperation in the company. By laying out the rules for potential disagreements or disputes, you can mitigate the risk of future conflicts and ensure that all parties are on the same page. It is important to approach this matter with care and consideration, as a well-crafted owner agreement can positively impact the longevity and success of your business.

What should an owner agreement contain?

At DKkonsult, we provide customised ownership agreements to meet the specific needs and requirements of our clients. As every business is unique, we understand that there cannot be a one-size-fits-all approach to drafting ownership agreements. Therefore, we work closely with our clients to identify the essential clauses that should be included in the agreement according to their preferences. Our team has extensive experience in advising clients on various aspects of ownership agreements, and we can tailor the agreement to regulate vital matters such as ownership percentage, decision-making powers, and transfer of ownership. By trusting us with your ownership agreement, you can be assured that you will receive a professional and personalised service that will safeguard your business interests. Among all the important things, it will be possible to regulate the following important matters:

• Company management: How should the company be managed on a daily basis, should there be a board of directors and who should be in the management?
• Decisions: What decisions require a majority of the company and what decisions require agreement among the owners?
• Vesting: Should it be possible for the owners to earn ownership through work in the company so that all the owners’ participation and motivation is maintained?
• Yield: When can the company start paying dividends, and should the dividend be stopped for a number of years or only when a certain equity is built up?
• Right of purchase: Should the other owners have the first right to buy ownership interests if another owner wants to sell his ownership interests and leave the company?
• Right of sale ( tag-along ): Should the other owners be allowed to sell their ownership interests if more than a certain portion of the company is sold to an outside buyer?
• Co-sales obligation ( drag-along ): Can minority owners be forced to sell their ownership interests if more than a certain portion of the company is sold to an outside buyer?
• Competition clause: Do owners need to invest, advise or work with other companies that run competing business?

How does an owner agreement become valid?

Once you have completed the form and paid for the ownership agreement, you will receive it immediately. Next, the ownership agreement must be dated and signed by all the company’s owners. The ownership agreement will then be valid and thus there is no requirement for registration, knowledge of witnesses, legal assistance or the like.

How to change an ownership agreement?

It is possible to convert your current agreement to a contract of ownership. The process will depend on the terms outlined in your original agreement. Generally, this conversion can occur at the Annual General Meeting. Proposed changes to the agreement require unanimous agreement from all parties involved.

While it is possible to modify an existing agreement, it is crucial to ensure that the initial agreement is detailed and comprehensive. In the event of a disagreement regarding a proposed addition, failure to reach a unanimous decision may render the ownership agreement invalid. Therefore, careful consideration and detail-oriented document creation are crucial in the beginning stages to prevent any issues or disagreements from arising in the future.

Create an Ownership Agreement online

Operating a business can be a complex endeavor and it is essential to have a comprehensive ownership agreement in place to define the ownership relationship. This will help prevent any potential conflicts or misunderstandings that may arise in the future. We can assist you in completing our easy-to-use online form and receive your documents promptly after payment is made, which will be fully prepared for signature. Our platform is designed to streamline this essential process, providing you with a professional and efficient way to handle your legal documentation requirements. We are committed to providing exceptional customer service and equipping you with the necessary tools to help your business thrive.