Partition Agreement Sro

When starting a business, it`s important to consider what type of legal structure you will use. One option is the « SRO, » or Société à Responsabilité Limitée. This is a common legal structure in French-speaking countries, including Switzerland, Belgium, and France. An SRO is similar to a limited liability company (LLC) in the United States. In an SRO, shareholders` liability is limited to the amount of their investment in the company. This means that if the company goes bankrupt, shareholders will not be personally responsible for its debts.

However, even with an SRO, it`s important to have a clear agreement in place between the shareholders. This is known as a « partition agreement. » A partition agreement is a contract between the shareholders that sets out the rules for how the company will be managed and how decisions will be made. It`s important to have this agreement in place to avoid misunderstandings or disputes between shareholders.

A partition agreement can cover a wide range of topics, including:

– Shareholder roles and responsibilities: This section outlines the roles of each shareholder in the company. For example, it may specify who will be responsible for day-to-day operations, who will handle financial matters, and who will be in charge of marketing and sales.

– Decision-making procedures: This section outlines how decisions will be made within the company. For example, it may specify that major decisions require a certain percentage of shareholder approval, or that certain decisions will require a unanimous vote.

– Shareholder rights: This section outlines the rights of each shareholder, such as the right to vote on major decisions or the right to sell their shares.

– Transfer of shares: This section outlines the procedures for selling or transferring shares in the company. For example, it may specify that other shareholders have the right of first refusal if one shareholder wants to sell their shares.

– Dispute resolution: This section outlines how disputes between shareholders will be resolved. It may specify that disputes will be resolved through mediation or arbitration, rather than going to court.

While a partition agreement is not legally required for an SRO, it`s strongly recommended. Without a clear agreement in place, there is a higher risk of disputes between shareholders, which can damage the company`s operations and reputation. In addition, having a partition agreement in place can make it easier to attract investors or secure financing, as it shows that the company has a solid foundation and a clear plan for growth.

In conclusion, if you are considering starting an SRO, it`s important to have a clear partition agreement in place. This agreement will help ensure that all shareholders are on the same page and that the company can operate smoothly and effectively. If you need help drafting a partition agreement, consider consulting with a legal professional who has experience working with SROs.