Benefits of an associate pact
When creating a company, it’s possible to set up an associate’s pact to deal with difficult situations between associates.
In this article, we’ll focus on the dangers you may face by not having such a pact.
Unprotected shareholders
The first advantage of this pact is that it provides a framework for the associates and shareholders. For example, it can define what percentage of the benefit they’ll get as dividends, or how much power they have.
As such, this pact effectively guarantees a certain situation for shareholders.
Disagreements between shareholders or associates
The associate’s pact is very helpful to deal with potential disagreements. Whenever a dispute breaks out, the pact can simply lay out the procedure to follow.
It can also help in many situations, such as an unplanned free transfer of shares, and makes it easier to manage voting rights or equity. If you’re planning on having your company grow and evolve, setting a framework right at the beginning might me a good idea!
