In the corporate world, a shareholders’ agreement is an essential piece of the puzzle, as it outlines the core principles upon which corporations must run.

Predominantly, the owners in a corporation reunite to draft this important document when they are starting the company. Regardless of the segment of a corporation, elaborating a solid shareholders’ agreement requires a lot of effort and attention to detail.

Keep reading on to discover the benefits of a shareholders’ agreement in Florida.

Understanding the Corporate Structure in Florida

In essence, a corporation is a business entity that separates from its owners. Hence, as long as they comply with specific requirements, the owners of a corporate business enjoy limited liability, meaning they cannot be held liable for the company’s liabilities.

Typically, a corporation is formed when a group of owners (shareholders) incorporates a business by filing the Articles of Incorporation. Although corporations have many tax advantages, they are more expensive and have stricter regulatory requirements when compared to other business structures.

Understanding Shareholder Agreements in Florida

A shareholder agreement is an internal document that outlines the rights and duties of shareholders within a corporate business. It is a valuable tool in terms of governance, management, business structuring, and funding of a corporation.

Typically, multiple parties reunite to prepare and sign a shareholders’ agreement when they are forming a joint venture. Additionally, this document is essential for companies with many shareholders involved, as it defines what is expected from each shareholder regarding the business.

As long as it does not violate the Florida Business Corporation Act (F.S. Chapter 607), a shareholders’ agreement can establish rules governing the corporate management system and all corporate powers.

What Are the Benefits of a Shareholders Agreement in Florida? – An Overview

When well-written by an expert business attorney, a Florida shareholder agreement will prevent disputes between shareholders and/or directors. Particularly, it is important for companies with no majority shareholders.

A shareholder agreement helps to maintain a business’s continuity, detailing the admission of additional/new shareholders, the transferring/selling of shares, the company’s governing structure, and procedures to deal with unpredictable circumstances.

Unlike the Articles of Incorporation, a shareholders’ agreement is completely confidential. As an internal document of corporations, corporate businesses are not required to make it available for everyone.

A common strategy used by shareholders is using the shareholders’ agreements to set out rights and duties they do not wish to make public in the Articles of Incorporation. By doing so, shareholders can protect sensitive information and keep it private.

Other beneficial possibilities provided by a solid shareholders’ agreement include:

  • Eliminating or restricting the authority of the board of directors (if necessary)
  • Establishing rules and parameters for strategic positions (e.g., directors, officers, etc.)
  • Establishing rules and parameters for voting procedures
  • Establishing the regulatory parameters for shareholders voting
  • Creating manners to impose restrictions on shareholders, directors, and officers (if necessary)
  • Establishing the procedures for dissolution, including the triggering event, specific period, etc.
  • Permitting shareholders to use corporate authority when necessary
  • Creating a solution for resolving deadlock situations between shareholders and/or directors

Additionally, it is possible to use a shareholders’ agreement to require shareholders to reimburse the business’s attorney’s fees if they put up an internal corporate claim or initiate business litigation.

Do You Want to Draft the Ideal Shareholder Agreement in Florida? – Work with Jurado and Farshchian, P.L.

The process of elaborating the ideal shareholder agreement for a corporation involves a lot of complexity, which requires a strategic approach.

If you do not want to waste time and money, contact Attorney Romy B. Jurado today by calling (305) 921-0976 or emailing