A shareholders agreement is an agreement between the shareholder and the corporation. When operating a business, the business owner and the business are two separate entities and should be treated as such. You should not treat your business like an extension of you. As a Certified Public Accountant I am concerned about the shareholders agreement addressing certain accounting issues. Some issues you should have in your agreement are:

Capital contributions

The shareholder agreement should discuss who decides the capital needs of the corporation. Once the need is determined, it should say who is responsible for meeting these needs, how much of the need they are responsible for and how soon they have to meet these needs.

Distributions

How much profits the corporation keeps and how much is distributed to the shareholders should also be discussed

Salary of corporate officers

The shareholder agreement should state who determines corporate officers salaries and when it is determined.

Meetings

The frequency of meetings and purpose should be documented in the shareholders agreement.

Day to day operations

The shareholders agreement should discuss who is responsible for day to day operations and signing contracts on behalf of the corporation

Reimbursed expenses

The shareholders should discuss how business expenses paid with personal funds should be handled. The corporation might approve reimbursements for expenses paid with personal funds or might require shareholders to claim these expenses on their personal tax returns.

Financial records

Where and who keeps the financial records should also be documented. Also, the frequency of creating financial reports for review should be addressed.

Taxes

Finally, the shareholder agreement should state who is responsible for filing the tax return.

These items mentioned here may seem simple but having them in place can reduce arguments if something goes wrong. For instance, if the tax return was not filed, the operating agreement will clearly state whose responsibility it was. Also, having an operating agreement makes it clear to shareholders what their responsibilities are.