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Understanding Partnership and Shareholder Agreements | Key Elements and Considerations #shorts

6 Nov 2023 · 1 min

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This content was created by Bob Gauvreau. This content was uploaded by Bob Gauvreau. This is a YouTube video titled "Understanding Partnership and Shareholder Agreements | Key Elements and Considerations #shorts" featuring Bob Gauvreau discussing the key elements of partnership and shareholder agreements, including partner alignment, exit strategies, and protection through life insurance.

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What a partnership agreement or a shareholder agreement really is, depending on the business structure. It could either be a partnership agreement if you're operating a partnership, or it could be a shareholder agreement if you're operating a corporation. So the very first thing is we want to ensure that both partners are aligned with what their contributions are going to be and how they're going to be compensated. We want to make sure that everybody's working within the agreed parameters. Also, how would one of the partners or shareholders get out of this business should circumstances arise? And a very popular way to get out of a business is called a shotgun clause. Another element is the idea of what happens if one of the partners gets injured, can no longer work or if unfortunately they pass away. Typically, what happens is there's a buyout arrangement where you use life insurance to essentially protect that investment. Those are three main criteria inside a shareholder or a partnership agreement.