Drafting a Contract or Company Statutes: Key Elements to Consider
BUSINESS LAW
10/3/20232 min read
Drafting a Contract or Company Statutes: Key Elements to Consider
Drafting the statutes or a company contract is a crucial step in creating a business. These documents, which define the internal functioning of the entity, must be clear, precise, and, above all, tailored to the needs of the partners. To ensure the quality of these writings, here are ten questions to ask and a brief review of the essential clauses to include.
The 10 Preliminary Questions:
What is the primary objective of the company?
How do you envision decision-making within the company?
How will profits and losses be distributed?
Are there any specific constraints related to the chosen activity or legal form?
How can partners join or leave the company?
How will potential disputes between partners be resolved?
What are the responsibilities and obligations of each partner?
How will the company be managed on a daily basis?
Do you anticipate a future sale or transfer of the company?
How can you guarantee the rights of each partner while ensuring the company's continuity?
General and Essential Clauses: These clauses define the company’s purpose: its name, corporate purpose, lifespan, registered office, etc. They give the company its identity.
Clauses Related to Company Management: This section defines how decisions will be made. Who will be in charge of daily management? How will general meetings be organized? What role will each partner play in this management?
Clauses Related to the Financial Rights of Partners: These clauses define the distribution of profits, dividend payments, handling of losses, etc. They ensure financial equity among partners and are crucial for mutual trust.
Entry and Exit Clauses: These provisions outline the conditions for welcoming new partners, the conditions for transferring shares, cases of departure (death, incapacity, etc.), and the conditions for repurchasing shares by the company or other partners.
Conclusion: Drafting the statutes or a company contract should not be taken lightly. These documents, which lay the foundation for the internal functioning of the company, must be carefully considered by asking the right questions to ensure a smooth and fruitful collaboration between partners. It is often recommended to seek the assistance of a legal professional to guide you through this essential process.
