Before starting to work together and before investing money. An agreement made while relations are good determines in advance what happens when a partner leaves or when there is a disagreement.
Companies and commercial agreements
A business rests on agreements: between the founders, with suppliers and customers, with investors and with lenders. A good agreement determines in advance who decides, who pays, and what happens on parting. The office accompanies companies, partnerships and business owners in drafting commercial agreements, in setting up a company and in managing commercial disputes, drawing on litigation experience: a lawyer who conducts disputes in court knows which clauses are tested there.
Which services does legal counsel for companies include?
- Incorporating a company. Choosing the form of incorporation, articles of association, registering the company with the Registrar of Companies under the Companies Law, 5759-1999, and allotting the shares.
- Drafting a founders agreement. Division of holdings, roles, investments, decision-making, and what happens when a founder leaves.
- Business partnership agreements and drafting a partnership contract. A partnership that is not a company, a joint venture and cooperation between businesses.
- Ongoing counsel. Advice on decisions, contracts and negotiations, and accompanying business entrepreneurship from the first stage.
- Winding up companies and separation of partners. An orderly exit of a partner, purchase of shares, or winding up.
Which commercial agreements does the office draft?
- Drafting a commercial contract and a business contract: supply agreements, service agreements and engagements with customers.
- Distribution agreements and marketing agreements: exclusivity, territories, targets, termination.
- Drafting a confidentiality agreement: before negotiations, with employees, suppliers and investors.
- Drafting a loan agreement: amount, interest, repayment dates, security, and what counts as a breach.
- Website terms of use and privacy policy: terms of use, cancellation policy and privacy policy for a site that sells products or services.
- Commercial leases and property transactions, see Commercial real estate.
For more on drafting contracts, see Contracts and agreements.
What should a founders agreement or partnership agreement determine?
- Who holds how much, and what each one invests: money, time, know-how.
- How decisions are made, and which decisions require the consent of all.
- What happens when more money is needed and one of the partners cannot or will not invest.
- What happens when a partner leaves, dies or stops working: to whom the shares pass and at what price.
- Non-competition and confidentiality.
- A mechanism for resolving disagreements: mediation, arbitration or court.
Most disputes between partners concern questions the agreement did not answer. It is far cheaper to decide them while relations are good.
Shareholder disputes and piercing the corporate veil
A dispute between shareholders. A disagreement over the management of the company, the distribution of profits, dilution or the exclusion of a partner from information and decisions. The tools are the agreement and the articles, the Companies Law, and sometimes a proceeding in court or in arbitration.
Piercing the corporate veil. A company is a separate legal person, and its debts are not the debts of the shareholders. In exceptional cases the court may attribute a debt of the company to a shareholder. A creditor who seeks this, and a shareholder defending against such an application, must base their arguments firmly on the facts.
The office represents clients in commercial disputes and commercial litigation: claims for breach of contract, rescission of agreements, monetary claims and interim relief. See Civil litigation.
The work in four stages
- Understanding the transaction. What each party gives and receives, and what the main risk is.
- Draft. Drafting the agreement, or reviewing a draft received from the other side.
- Negotiation. Accompaniment until an agreed text.
- Signature and follow-up. Signing, registration where required, and accompaniment in performance.
What to bring to the meeting
- A short description of the business or the transaction.
- Drafts, quotations and correspondence with the other side.
- The company documents: articles, founders agreement, extract from the Companies Register.
- In a dispute: the agreement, the correspondence and the pleadings, if any.
Timetable and cost
Timetable: depends on the complexity of the agreement and the pace of the negotiation. It is worth making contact before the commercial terms are settled, not after.
Cost: the fee is set in advance in a written fee agreement, according to the scope of the work.
Want to draft an agreement or consult about a dispute?
You may contact the office to draft an agreement, to review an agreement you received, or to assess a dispute with a partner, supplier or customer.
Questions and answers
When should a founders agreement be made?
Is a shareholder liable for the company's debts?
As a rule, no. A company is a separate legal person. In exceptional cases the court may pierce the corporate veil and attribute a debt of the company to a shareholder, and personal liability may also arise from a personal guarantee the shareholder signed.
Can I use an agreement from the internet?
A generic agreement is not fitted to your transaction, and it often lacks exactly the clauses needed in a dispute: termination, liability, security and a mechanism for resolving disagreements.
Which is better in a commercial agreement: arbitration or court?
It depends on the transaction. Arbitration is discreet and flexible, but as a rule there is no appeal against it. The decision is made when the agreement is drafted. See the arbitration page.
Does every website need terms of use and a privacy policy?
A site that sells products or services, or collects information about visitors, needs terms of use and a privacy policy that fit its actual activity, not a copy from another site.
Need a lawyer or a notary?
A short initial consultation call, to understand whether and how we can help.