A shareholder's percentage does not itself define their job, salary or authority to sign contracts. Record who appoints directors, which decisions require special approval, how further funding is provided and what happens if someone stops working. Sections 180 to 183 of the Corporations Act 2001 (Cth) impose duties on directors and officers, including care, good faith and restrictions on misuse of position or information. A private agreement cannot simply remove statutory duties.
Address deadlock, voluntary transfers, pre-emption rights, death, incapacity and serious default. A valuation clause should identify the valuation basis, information available to the valuer and treatment of debt. A forced transfer mechanism needs careful drafting; a label such as "bad leaver" does not resolve questions about enforceability or fairness. Align the arrangements with succession plans and any relevant insurance.
Sections 232 and 233 allow relief for qualifying oppressive or unfairly prejudicial conduct, with a range of possible orders. In Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25, the High Court left standing the setting aside of the buy-out order. The dispute concerned both the business acquisition and its aftermath. It demonstrates why an agreed exit mechanism and evidence of the parties' dealings matter; it does not give every dissatisfied shareholder a right to be bought out.
Bring the constitution, share register, proposed ownership percentages, funding commitments and each person's intended role. Where discussions take place in Mandarin and documents are in English, confirm the essential terms in a form everyone understands. Independent advice is particularly useful when family loyalty makes a difficult commercial conversation easy to postpone.
Author: Yi Liang
Last updated: October 2026
Jurisdiction: Victoria, Australia
Disclaimer: This article provides general information only and does not constitute legal, financial or tax advice. The law may change and its application depends on individual circumstances. You should obtain professional advice before acting on the information contained in this article.