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    This Is The Ultimate Insurance Policy For Your Company

    A rock-solid shareholder agreement

    I noticed many aspiring founders jump into setting up a company without having a shareholders agreement or even a term sheet in place.

    The usual excuse boils down to wanting to save money by not hiring a corporate lawyer. Sometimes you want to avoid dealing with the difficult conversations you need to have with your co-founders such as a clear division of labour and responsibilities. If you decide to take these risks, you should be ready to blame yourself too for losing your company if there is a shareholder dispute.

    The worst thing you can do is to agree on a 50/50 split with someone you just met at a networking event to form a new company together. If both of you cannot agree on a business decision, there will be a deadlock. If you are no longer on talking terms, it will be impossible for you to sign a shareholders agreement then and it may further escalate when lawyers get involved.

    Just like an insurance policy, a solid shareholder agreement in place can give you a peaceful night’s sleep, free from the worry and uncertainty that can arise from business disputes and disagreements.

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    Izwan Zakaria runs Izwan & Partners, a corporate law firm helping startups and technology companies do business and raise capital in Malaysia and overseas. In 2020, Izwan was named as one of the ‘30 people to watch in the business of law’ by The Asia Law Portal.

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