Unitholders agreements are essential legal documents that outline the rights, responsibilities, and expectations of investors in a unit trust or similar entity. A well-crafted template can provide a solid foundation for these agreements, ensuring clarity, fairness, and legal compliance.
Key Components of a Unitholders Agreement Template
1. Parties: Clearly identify the parties involved in the agreement, including the unit trust, the trustee, and the unitholders.
2. Definitions: Define key terms and concepts that will be used throughout the agreement, such as “unit,” “unit trust,” “trustee,” “unitholder,” and “distribution.”
3. Issuance of Units: Specify the terms and conditions governing the issuance of units to unitholders, including the issuance price, procedures, and any restrictions or limitations.
4. Rights and Obligations of Unitholders: Outline the rights and obligations of unitholders, including their right to receive distributions, participate in meetings, and vote on certain matters.
5. Rights and Obligations of the Trustee: Define the rights and obligations of the trustee, including their fiduciary duties to manage the unit trust’s assets and act in the best interests of unitholders.
6. Distribution of Income and Capital: Explain how income and capital gains will be distributed to unitholders, including the frequency of distributions and any applicable tax implications.
7. Meetings and Voting: Specify the procedures for holding meetings of unitholders, including quorum requirements, voting rights, and the types of matters that can be voted on.
8. Amendment and Termination: Address the procedures for amending the agreement and for terminating the unit trust, including grounds for termination and the distribution of assets upon termination.
9. Governing Law and Dispute Resolution: Specify the governing law applicable to the agreement and the dispute resolution mechanisms, such as arbitration or mediation.
10. Miscellaneous Provisions: Include any additional provisions that may be necessary or desirable, such as indemnification clauses, confidentiality provisions, and force majeure clauses.
Design Elements for Professionalism and Trust
Clear and Concise Language: Use plain, everyday language that is easy to understand. Avoid legal jargon whenever possible.
Additional Considerations
Customization: Tailor the template to the specific needs and circumstances of the unit trust.
By following these guidelines and incorporating the key components of a unitholders agreement template, you can create a professional and effective document that protects the interests of both the unit trust and its unitholders.
