What is the process for modifying a shareholders’ agreement for a San Diego or California corporation. There are several reasons why it may be necessary to make changes to the shareholder’s agreement of a San Diego corporation. The corporate documents, bylaws and shareholders agreement should be updated regularly as part of corporate governance and compliance.
Changes Which May Require Modifying a Shareholders’ Agreement
There may be an opportunity for the business to expand and grow, and new investors are entering the business requiring modification to the underlying shareholder’s agreement. If there is a cash call, or other event that triggers clauses within a shareholder’s agreement it may not be possible for one or more of the parties to meet their obligations.
Changes in the nature of the business itself, or a merger with another corporation may require a renegotiation of your shareholders agreement. In some cases changes in federal, state or local laws and / or ordinances can mandate changes to the shareholder’s agreement or the associated corporate bylaws. If there are other issues that arise, corporate bylaws can quickly fall out of compliance or actually conflict with the existing shareholder’s agreement. Disagreement between corporate documents can result in shareholder disputes and expensive and time consuming litigation. Updates and changes to the San Diego Shareholder’s agreement will be constantly required throughout the life of a corporate entity.
How Are Shareholders’ Agreements Changed
What happens in these cases? Negotiations usually take place to work out the implications of the events, resulting in changes to the corporate by-laws and/or the establishment of a new shareholder’s agreement moving forward.
The Watkins Firm represents individual shareholders and serves as general business counsel to companies throughout San Diego and across Southern California. We advise on all shareholder’s rights issues and can help to negotiate, edit, review and update corporate documents to incorporate changes to the San Diego shareholder’s agreement of your company.
If you hold an interest in a San Diego or Southern California corporation and have a question about your company’s shareholder’s agreement we invite you to review the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.
