001-015 - Co-Ownership Agreements

The best time to finalise an agreement that relates to disputes, sale of the business, major capital expenditure, policy on the treatment of profits, decision-making, restraint of trade and many other issues is when the business is being formed, not months or years later when the same level of enthusiasm and friendship that was there at the beginning of the business may not be as evident.

It’s a good idea for a commercial solicitor to be involved in the preparation of a Co-Ownership Agreement – but in the first instance the partners, unit holders in a unit trust or shareholders in a company should have given some consideration to their views on a range of issues that could ultimately lead to arguments and long-term relationship breakdowns if sufficient consideration of the issues involved is not given at the very beginning of the business relationships.

This paper gives an overview of Co-Ownership Agreements and has been written under the following headings:

  • Think About Issues At The Beginning
  • Set The Rules
  • Principal's Labour Contribution
  • Decision-Making Process
  • Restraint Of Trade
  • Working Capital
  • Treatment Of Profits
  • Sale Of Equity
  • Forced Exit
  • Calculation Of An Exit Value
  • Buy-Sell Agreement
  • Dispute Resolution
  • Drag-Along Rights
  • Tag-Along Rights
  • Best Prepared At The Beginning
  • Accountant’s Assistance
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