Drafting Shareholder & Partnership Agreements

Safeguarding Your Interests with Shareholder and Partnership Agreements in Texas

At Hendershot Cowart P.C., our Houston-based business attorneys have an established record of counseling and representing shareholders in matters involving shareholder disputes, oppression, shareholder derivative suits, and individual shareholder claims. While we provide responsive legal services to litigate claims, we also work with clients to mitigate the underlying issues behind those causes of action by drafting shareholder agreements.

Shareholder agreements are a means of addressing pivotal events and contingencies before they arise. By properly documenting shareholder (and partnership) rights and responsibilities, conflict can often be avoided or resolved cost-effectively and minimally disruptively, preventing business disruptions, lost value, and litigated disputes.

Call Hendershot Cowart P.C. today at (713) 909-7323 or contact us online to schedule a meeting with our shareholder agreement attorney in Houston!

Essential Strategies for Avoiding Disputes in Shareholder and Partnership Agreements

Critical components and potential areas of conflict we address in shareholder or partnership agreements include:

• A method to determine the value of shares in advance to prevent shareholder disputes
• Control and management agreements
• Ownership interests may include the amount of initial contribution, the structure of equity compensation, stock options, vesting options, the method of share valuation, and the conditions by which company shares can be sold (e.g., right of first refusal).
• Roles of majority and minority shareholders in corporate decision-making and ongoing operations, duties and obligations, voting rights, authority to act, and other provisions
• Developing covenants not to compete (non-competition clauses or non-compete agreements) with proven non-compete attorneys. Why? If one partner or shareholder is bought out under difficult circumstances, you take the risk of not having a provision in the shareholder agreement for non-competition and/or non-solicitation. The partner or shareholder could turn around and begin competing directly against you.
• Measures to prevent minority shareholder oppression
• Options for removal of inactive or potentially harmful, divisive, and otherwise undesirable shareholder(s)
• Procedures to designate, replace, or remove directors or officers
• Protection and ownership of trade secrets and intellectual property, including client lists, formulas, business plans, and more
• Rights and limitations
• An established procedure for dealing with buyout offers and events likely to impact ownership and control. This can include triggering events (such as a personal divorce, resignation, or retirement), the purchase price, how to determine the purchase price, and how the purchase price will be paid. The key here is that the process has been established before a problem arises, not after, which may be too late by then.

Rely on Our Team’s 100+ Years of Combined Legal Expertise

Predicting specific problems and disputes while drafting partnership and shareholder agreements may be impossible, but protecting your interests through a shareholder agreement for issues that may arise is a sound legal decision well within reach. In today’s legal landscape, especially after the Texas Supreme Court struck down the shareholder oppression cause of action in Ritchie v. Rupe, shareholder agreements have become increasingly essential for minority shareholders of closely held businesses.

As proven litigators well-versed in transactional and contract development, our firm has the foresight to structure and versatility to handle all paths to resolution, including arbitration, mediation, and asserting claims or defense in court.

Our team at Hendershot Cowart P.C. proudly serves clients in Houston, throughout Texas, and the U.S., and is available to discuss how we can guide partners and shareholders through establishing, modifying, or challenging partnership and shareholder agreements and other business contracts. We also assist our clients involved in business disputes, including breach of contract violations, breach of fiduciary duties, business fraud, or other bad faith situations.

Contact Hendershot Cowart P.C. today to schedule a meeting with our shareholder agreement lawyer in Houston!