60 - Why you need a Shareholders Agreement
Shareholders’ Agreements: The Missing Document That Can Save Your Business
Melissa Bush explains why every Australian company with more than one shareholder needs a tailored shareholders’ agreement, distinct from a public constitution or the Corporations Act replaceable rules, because it governs owners’ relationships, confidentiality, and key risk areas like share transfers, valuation, contributions, exit rights, and deadlock. She illustrates the consequences through Pittak v Sudpatumjudom (NSW Supreme Court, 2025), where two couples informally agreed to run a Loftus Lane, Sydney café 50/50, but the operating company (SLT) was solely owned and directed by one party, with nothing in writing; disputes over profit vs revenue, alleged $77,745.32 cash contributions, and control escalated into years of litigation, ending with claims dismissed and the café liquidated. Bush outlines common mistakes: relying on trust, using templates, never reviewing agreements, and not involving accountants/financial planners and invites listeners to contact Shire Legal or join the Café Kickstart course.
00:00 Cafe Dream Turns Sour
01:27 Why You Need One
03:13 Podcast Intro Disclaimer
04:20 What It Is Exactly
04:33 Constitution vs Agreement
08:01 Who Actually Needs It
08:36 Trust Is Not Enough
10:03 The Pittack Case Setup
13:26 Court Issues And Rulings
17:54 How An Agreement Fixes It
21:23 Exit And Deadlock Clauses
24:21 Common Mistakes To Avoid
29:19 Wrap Up And Next Steps
