Business & commercial
What Should a Partnership or Shareholders Agreement Cover?
An owners’ agreement should explain how the business is governed, funded and exited before disagreement occurs. The correct document depends on whether the business operates through a partnership, company, trust or combination. It must work with the constitution, trust deed, finance documents and applicable legislation.
Core issues
- ownership and initial contributions;
- roles, authority and time commitment;
- voting and reserved decisions;
- salary, distributions and reinvestment;
- new funding and guarantees;
- transfer restrictions and pre-emptive rights;
- valuation and payment terms;
- death, incapacity, insolvency and misconduct;
- deadlock and dispute resolution;
- confidentiality, intellectual property and restraints; and
- succession and insurance arrangements.
Why default legal rules are not enough
Without a tailored agreement, legislation and general law may produce outcomes the owners did not expect. Informal understandings are especially vulnerable when circumstances change.
Deal with exits when relationships are good
Specify voluntary sale, forced transfer events, valuation method, funding and release from guarantees. A business interest may be difficult to realise if the agreement has no practical exit process.
Hypothetical example
Two equal shareholders disagree about expansion and neither can outvote the other. A staged deadlock process—meeting, mediation and a carefully designed buyout mechanism—may avoid paralysis, but the mechanism must be commercially fundable.
Review related documents
Company constitution, ASIC records, trust deed, employment or service agreements, loans, leases, guarantees, insurance and estate plans.
Put the owners’ arrangement in writing
Book a business-owners consultation.
Sources to verify at legal review
First drafted: 21 July 2026. General information only.