Main Advantages of a USA
01.
Clear Decision Making Framework
02.
Dispute Resolution Mechanism
03.
Control Over Share Transfers
04.
Protection of Shareholder Rights
05.
Limitation of Board Powers
Why Should You Consider A USA?
A USA is a legally binding contract among all the shareholders of a corporation. It outlines the rules and procedures for corporate governance, and ensures that shareholder rights are protected.
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The three primary purposes of a USA are:
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To empower shareholders to govern and manage the business by restricting directors' powers;
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to specify means of dispute resolution; and
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to dictate how shareholders can join or exit the company.
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A USA can effectively minimize risks and conflicts within a corporation, which allows shareholders to focus on the growth of the corporation, opposed to spending their time defending decisions and focusing on corporate governance.
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A USA will help avoid deadlocks with decision-making provisions, and can help you manage unexpected ownership changes by including share transfer rules.
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They are not a one-size-fits-all type of document. A USA will be customized to the unique needs of your organization, and therefore, we highly recommend seeking the help of an experienced corporate lawyer to ensure that the agreement complies with all relevant legal requirements, while also addressing the concerns of the shareholders.