Corporate Agreement

A corporate agreement is a way to document the goals, desires, and agreements of business participants and other parties (potential business participants or banks). In a corporate agreement, you can specify the business participants' agreements and the responsibility for their breach. If one participant fails to meet their obligations, others can compel them to fulfill the initial agreements and pay a penalty for breaching the contract.

Specialists at "Usconsult" have a successful practice in developing corporate agreements, detailing conditions for participants to exit deadlock situations, grounds for buying out a share from an unscrupulous partner (option/forced buyout of the share), other profit distribution methods, and participant responsibility for breach of obligations.

The Corporate Agreement Allows You to:

• Determine how you will manage funds from the joint business (how profits will be distributed, who and how much money will invest in the business, and when financing can be attracted)
• Document your business goals for the near future (it is possible to outline each participant's obligations, such as the obligation to vote a certain way at participant meetings)
• Prevent conflicts that may arise in joint business activities (for example, you can stipulate dispute resolution procedures and alternative courses of action if an agreement cannot be reached)
• Determine possible development options for your business
• Prohibit certain actions (for example, leaving the company or accepting new participants)
• Establish the type and size of liability for breach of the agreement (penalties, exclusion of a participant from the company, the right to a forced sale (purchase) of shares/stocks at a below-market predetermined price)

When is a Corporate Agreement Necessary?

• When a new partner joins an existing business (the corporate agreement will allow the parties to establish basic cooperation rules and protect them from each other's unscrupulous actions)
• When a partner may exit the business (a corporate agreement will allow the parties to separate most comfortably and gain the maximum benefit from the collaboration)
• To divide rights, obligations, and responsibilities among participants with equal shares (50/50; 33/33/33, etc.)
• To protect the interests of third parties (banks, creditors, investors, etc.)
• If one partner plans to engage in another business simultaneously (it is possible to specify conditions prohibiting competing activities)
• When the company is established jointly with a foreign (regional) company to enter new markets

Advantages of a Corporate Agreement from Usconsult:

• Usconsult strategies work (based on experience and client feedback)
• Focus on solving the client's task and developing an optimal legal solution (forming the task and desired maximum result jointly with the client)
• Ensuring sustainable business development by developing an optimal protection strategy
• Identifying all possible risks of corporate conflicts and business loss and offering ways to minimize them
• Defining an effective mechanism for implementing the terms of the corporate agreement
• Offering several solution options with descriptions of the pros and cons of each option and indicating the most promising one
• A comprehensive approach to solving the most complex tasks – a project group includes specialists from different legal profiles: taxes, bankruptcy, corporate law, energy, ecology, criminal law
• Minimizing risks in case of litigation and defending client interests in court

Our Experience

• Preparing a company for the entry of new participants. Forming an option and corporate agreement to minimize potential risks, securing, and limiting the director's powers. Comprehensive support of the company at all stages of the share alienation transaction.
• Developing a corporate agreement between two shareholders of a film studio, with participant rights and obligations, deadlock resolution mechanisms, and ways to ensure the fulfillment of obligations. A list of issues requiring unanimous decisions by participants is outlined.
• Developing a corporate agreement for four society members, with a feature of not distributing profits among participants for five years, directing them to development, and with conditions for the founder's forced buyout of other participants' shares under certain circumstances (e.g., in case of dishonest performance of participants' functions; in case of participant actions causing losses to the society; in case of violation of the non-compete clause, etc.)
• Conducting partner sessions and preparing partnership agreements for partners from various economic sectors (industry and trade, microfinance organizations, IT industry, and construction).

What Do You Need to Do?

Step #1: Dial our phone number +7 383 204 92 11.

Step #2: Schedule a consultation with Evgeniya Bondarenko, managing partner of "Usconsult," head of corporate practice and business reengineering practice, tax consultant, business partnership architect with 22 years of experience in legal protection and business development.