When Passion Outpaces Planning: Why Growing Businesses Need Proper Shareholder Agreements

A practical reminder for owners who are ready to grow but not ready for unnecessary risk

At Business Studio, we work with many business owners who have poured heart, soul, and savings into their idea. They can see what their business could become — they just need more capital to unlock the next stage of growth.

When funding feels out of reach, even the most confident owner can feel stuck. That’s often when someone new appears: an enthusiastic investor, a supportive friend, or a well-connected industry contact who offers to help.

In the excitement of feeling “rescued,” it’s common for owners to move quickly. Shares get offered. Deals are made verbally. And too often, no accountant, no lawyer, and no documentation are involved, but the Companies Office does get updated.

We have been observing this as a new trend in business — and it’s one that can create long-term challenges if not managed well.

THE TEMPTATION TO MOVE FAST

When you’re under pressure, urgency can feel like strategy. A potential investor shows interest, and it feels like momentum.

This is the honeymoon phase — energy is high, everyone is positive, and the relationship feels easy. But this is also when important protections get overlooked.

WHEN NOTHING IS DOCUMENTED, EVERYTHING BECOMES RISKY

Without proper advice and documentation, you may find:

• No clarity on decision-making or voting rights

• No defined responsibilities for each shareholder

• No agreed expectations around capital contributions

• With the passage of time, a real risk that one party forgets what was “negotiated” versus what was actually “agreed”

• No process if someone fails to perform

• Tax or legal implications that could have been prevented

• Limited options if things go wrong

THE HONEYMOON PHASE DOESN’T LAST FOREVER

Enthusiasm fades when real work is required. Promised help doesn’t materialise. Expectations differ. Interest drops. Without documentation, you may have very limited options.

KEEP CLEAR MINUTES OF EVERY DISCUSSION

Document:

• Who has offered what (money, time, introductions, expertise)

• Whether you are negotiating or have agreed “in principle”

• Expectations on both sides

• Timelines or commitments discussed

Minutes don’t replace a legal agreement, but they create clarity and give your advisors a foundation to work from.

A SHAREHOLDERS’ AGREEMENT IS YOUR SAFETY NET

A strong agreement covers:

• Roles and responsibilities

• Decision-making rules

• Capital contributions

• Performance expectations

• Dispute resolution

• Exit and buy-back provisions

BRINGING IN A SHAREHOLDER SHOULD FEEL EXCITING — AND SAFE

Growth should be intentional, not reactive. Agreements keep enthusiasm grounded, aligned, and sustainable.

A new shareholder can accelerate your growth — but only if the foundations are secure.

Taking the time to document discussions, seek professional advice, and put a strong shareholders’ agreement in place protects both the relationship and the business you’ve worked so hard to build.

Growth should never rely on guesswork. If you’re considering taking on an investor or partner, Business Studio Innovators can help you navigate the process with clarity, confidence, and the right safeguards in place. Contact us or book a free 30-minute consultation.