A Shareholder and Unit Holder Agreement governs the relationship between the shareholders of a company and unit holders of a trust. It covers critical information such as decision making, dispute resolution, exit strategies etc.

Shareholder and Unit Holder Agreements are commonly utilised during critical stages in a business's life cycle. They are primarily established when:

• Forming a new business: when starting a new company or unit trust, these agreements provide a foundational structure, clarifying ownership and roles among initial investors or partners.
• Investment rounds: during funding rounds, especially when new investors come on board, existing shareholders may want to set terms that protect their interests and outline the rights of new investors.
• Business restructuring: if a company undergoes a merger, acquisition, or significant restructuring, updating or creating a new agreement is essential to reflect changes in ownership or operational control.
• Partnership changes: when a shareholder or unit holder decides to leave the business or transfer their interests, these agreements provide mechanisms for buyouts and the valuation of shares or units.
• Dispute resolution: in the event of disagreements among shareholders or unit holders, these agreements serve as a reference point for resolving conflicts, ensuring fairness and clarity.
• Exit strategies: when planning for the future, such as retirement or succession planning, these agreements help define the exit strategies for owners and protect the company’s long-term stability.

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At West Perth Legal, we work with both shareholders and unit holders to establish clear responsibilities and manage risks around shareholder and unit holder relationships.