Business and commercial
Agree on the difficult questions before the relationship is tested.
A useful owners agreement addresses decisions, money, work expectations, information, exits, incapacity, death and deadlock. When a dispute has already arisen, preserve records and obtain advice before taking irreversible action.
Conflict clearance and written engagement are required before the firm acts.Quick answer
Do business owners in WA need a partnership or shareholders agreement?
A well-drafted owners agreement matters most when circumstances change — illness, exit, disagreement or death. It should address decision-making, funding, drawings, access to records, exits and valuation, incapacity and death, and how deadlock and disputes are resolved. If a dispute has already arisen, preserve records and obtain advice before taking irreversible steps.
- Agreements matter most when circumstances change, not while all is well.
- Cover decisions, funding, drawings, exits, valuation, death and deadlock.
- Deadlock needs a resolution mechanism agreed in advance.
- Forcing a buy-out usually needs an agreed pathway to exist.
- In a dispute, preserve records and avoid irreversible action first.
Jurisdiction: Western Australia.
What the agreement should cover
- Ownership and initial contributions.
- Roles, authority and reserved decisions.
- Further funding and drawings.
- Access to accounts and records.
- Conflicts and competing interests.
- Transfer, retirement and valuation.
- Death, incapacity and succession.
- Default, deadlock and dispute resolution.
If a dispute has arisen
- Preserve agreements, messages and financial records.
- Identify urgent asset, banking or deadline risks.
- Avoid public allegations and destructive account changes without advice.
- Consider negotiation, mediation and court remedies proportionately.
COMMON QUESTIONS
Frequently asked questions
Do we need an agreement if we trust each other?+
Agreements matter most when circumstances change — illness, exit, disagreement or death. Deciding the hard questions while relationships are good protects everyone.
What is deadlock and how is it resolved?+
Deadlock is where owners cannot agree on a decision. A well-drafted agreement sets out a resolution mechanism, which may include mediation, buy-out or, as a last resort, winding up.
Can I force the other owner to buy me out?+
Only if the agreement or law provides a pathway. This is why exit and valuation terms should be agreed in advance; without them, options are more limited and costly.
What should I do first in a dispute?+
Preserve records, avoid irreversible steps, and get advice quickly. Early, proportionate action often preserves more options than reacting publicly or unilaterally.