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View media pack ➜How Shareholder Agreements Lay Foundations for Harmony
Shareholder agreements are the cornerstone of any successful business partnership, providing a roadmap for navigating potential conflicts and ensuring alignment among stakeholders. By establishing clear guidelines and expectations upfront, these agreements pave the way for harmony and collaboration, setting the stage for long-term growth and prosperity. In this article, we delve into the advantages of using a shareholder agreement template and outline five top tips for crafting an effective agreement that benefits the business in the long run.Advantages of Using a Shareholder Agreement TemplateUtilising a shareholder agreement template offers numerous benefits to business owners. Firstly, it streamlines the process, saving valuable time and resources. Templates are pre-drafted by legal professionals, ensuring that essential clauses and considerations are included. However, they also provide flexibility, allowing customisation to suit the unique needs and circumstances of your business. This combination of efficiency and adaptability provides a solid foundation for building a robust shareholder agreement.Top Tips for an Effective Shareholder AgreementDefine Ownership and Equity Distribution Clearly: Clearly outline each shareholder's ownership percentage and how equity will be distributed. This helps avoid misunderstandings and disputes over ownership rights in the future. For example, if one shareholder is contributing more capital or expertise than others, their ownership stake should reflect this contribution.Benefit: By establishing clear ownership parameters, the business can prevent conflicts arising from ambiguity and ensure fairness among stakeholders. For instance, if a shareholder decides to exit the company, a well-defined ownership structure simplifies the process of redistributing shares or bringing in new investors.Establish Decision-Making Procedures: Detail how key decisions will be made within the company, including voting rights and procedures for resolving disputes. This ensures that important matters are handled efficiently and transparently, preventing gridlock or unilateral decision-making. For instance, specify whether decisions require a simple majority or a unanimous vote, depending on the significance of the issue.Benefit: By clarifying decision-making processes, the business can avoid conflicts and delays in crucial matters. For example, if there's a disagreement among shareholders regarding a strategic decision, having predefined procedures in place helps resolve disputes swiftly and maintain business continuity.Address Shareholder Responsibilities and Obligations: Clearly outline the roles, responsibilities, and obligations of each shareholder within the agreement. This includes contributions to capital, participation in decision-making, and any specific duties or commitments. For example, if one shareholder is responsible for overseeing a particular aspect of the business, such as marketing or finance, their role should be clearly defined.Benefit: By delineating shareholder responsibilities, the business can ensure accountability and alignment of interests among stakeholders. For instance, if a shareholder fails to fulfil their obligations outlined in the agreement, there are clear grounds for addressing the issue and mitigating potential disruptions to the business.Plan for Potential Exit Scenarios: Anticipate and address potential exit scenarios, such as selling shares, transferring ownership, or resolving disputes among shareholders. Establish procedures for handling these situations to minimise disruptions to the business and protect the interests of all parties involved. For example, include buy-sell provisions that dictate how shares will be valued and transferred in the event of a shareholder's departure.Benefit: Planning for exit scenarios upfront helps mitigate risks and uncertainties, providing clarity and security for shareholders. For instance, if a shareholder decides to sell their stake in the company, having predefined procedures in place streamlines the process and minimises the likelihood of disputes or disruptions to business operations.Include Mechanisms for Dispute Resolution: Incorporate mechanisms for resolving disputes among shareholders, such as mediation or arbitration clauses. This ensures that conflicts can be addressed promptly and amicably, preserving the harmony and integrity of the business partnership. For example, specify that disputes will be resolved through mediation before escalating to arbitration or litigation.Benefit: By including dispute resolution mechanisms, the business can minimise the impact of conflicts on operations and relationships among shareholders. For instance, if disagreements arise over strategic decisions or the interpretation of the agreement, having structured processes for resolution promotes transparency and preserves the overall cohesion of the business.In conclusion, shareholder agreements play a crucial role in laying the foundations for harmony and collaboration among business owners. By utilising templates and following these top tips for crafting an effective agreement, businesses can establish clear guidelines, prevent conflicts, and promote long-term success. Investing time and effort into drafting a comprehensive shareholder agreement is an essential step towards building a strong and resilient business partnership.
Read nowBanks’ Bad Loans Ratio Highest In 8 Months In Philippines
Commercial loans are considered non performing if the borrower has not made the scheduled payments for 90 days after the due date The share of bad loans to the banking sector's total loan book went up to an eight-month high in January, snapping two straight months of decline, as borrowers felt the pinch of elevated interest rates. Preliminary data released by the Bangko Sentral ng Pilipinas (BSP) showed that the non-performing loan (NPL) ratio of Philippine banks rose to 3.44 percent in January from the revised 3.24 percent in December, the highest in eight months or since the 3.46 percent in May 2023. After improving for four straight months to hit a six-month low of 3.40 percent in September, the NPL ratio picked up to 3.44 percent in October before easing to 3.41 percent in November. As of end-2023, the industry's NPL ratio was at 3.24 percent, higher than the 3.16 percent as of end-2022. The ratio peaked at 4.51 percent in July and August 2021, at the height of the COVID-19 pandemic. Commercial loans are considered non performing if the borrower has not made the scheduled payments for 90 days after the due date. They are deemed as risk assets given borrowers are unlikely to settle such loans. Based on BSP data, soured loans climbed by 13.7 percent to P460.76 billion in January from P405.14 billion in the same month last year. Philippine lenders saw an 8.3-percent rise in loan disbursements to P13.38 trillion in January from P12.35 trillion a year ago. The banking sector's past due loans increased by 15.4 percent to P571.56 billion from P495.15 billion as restructured loans slipped by 6.3 percent to P301.99 billion from P322.14 billion. Banks beefed up their loan loss reserves by 7.3 percent to P462.12 billion in January from P430.48 billion in the same month last year, amid the rising soured loans and past due loans. This translated to a loan loss reserve level of 3.45 percent and an NPL coverage ratio of 100.29 percent. The BSP hiked key policy rates by a total of 450 basis points from May 2022 to October 2023 to tame inflation and stabilize the peso, making it the most aggressive central bank in the region. After raising the benchmark policy interest rate by 350 basis points in 2022, the BSP tightened the key rate by another 100 basis points throughout 2023, bringing it to a near 17-year high of 6.5 percent.
Read nowHow Inventory Management Software Propels Omnichannel Retail
Increasingly more customers prefer to interact with sellers via multiple offline and online channels, prompting businesses to shift towards an omnichannel retail approach. In 2022, 76.3% of retailers from the Top 500 offered their customers buy online pick up in store (BOPIS) services. This figure increased to 82.7% by 2023, according to the 2023 Omnichannel Report by Digital Commerce 360. A robust omnichannel strategy can help a business significantly increase its sales and profits - the National Retail Federation considers omnichannel customers the most valuable retail segment. However, the omnichannel retail transformation can present certain challenges for businesses that have to deal with the growing inventory management complexity and cost. Consequently, many retail companies are using inventory management software to address these challenges. This article provides three use cases illustrating how inventory management systems (IMS) help retailers establish more efficient omnichannel businesses. 1. Centralized inventory tracking and control Tracking and distributing inventory across multiple sales channels can be too complex, especially for large retailers operating tens or hundreds of thousands of product items. An omnichannel retail business has to maintain optimal inventory levels in its physical stores and, at the same time, ensure timely delivery to online customers. An inventory management system helps a merchant solve these challenges by consolidating inventory data from multiple sources, including 3PLs, stores, and warehouses, thus enabling employees to track inventory levels from one central location. A robust inventory management system can even update inventory data in real-time each time a customer purchases via this or that channel, resulting in improved inventory visibility. 2. More precise demand forecasting Avoiding inventory shortages and overstocking is one of the critical aspects of a retail business, as both can negatively influence customer satisfaction and business performance. For example, according to the Retail Resilience Barometer report 2023 from ROI Hunter, 99% of UK-based retailers experience losses of at least £10,000 per quarter due to overstocking. Apparently, accurate inventory optimization cannot be considered an easy task even for single-channel merchants, not to mention those involved in omnichannel retail. Fortunately, inventory management systems allow retailers to avoid inventory shortage and surplus, as they provide various tools for inventory optimization. In a simple scenario, employees can use such a system to set maximum and minimum stock levels across the company's warehouses or stores. If stock levels go beyond those specified thresholds, inventory management systems alert procurement team members so they can place orders accordingly. Moreover, companies can take a more proactive and intelligent approach toward inventory optimization by implementing inventory management software with predictive analytics capabilities. Such an AI-powered inventory management system can predict demand fluctuations for each particular sales channel, which allows a retailer to manage safety stock more accurately and avoid stockouts. An AI-powered system can use different machine learning and statistical algorithms to generate inventory demand forecasts based on various data sources. These sources may include internal data, such as sales history for the particular sales channel, as well as the data provided by third-party sources, such as news feeds, social media, and weather forecasts. Employees can use such forecasts to plan inventory more accurately and predict future revenues across physical and online sales channels. Amazon, a retailer serving more than 310 million customers across over 100 regions globally, uses multiple predictive analytics techniques to forecast demand for millions of product items across online and offline channels (besides online retail business, the company operates a chain of 43 convenience stores called Amazon Go). After introducing deep learning neural networks into its forecasting solution, the retailer increased forecast accuracy by 15 times. 3. Automated inventory replenishment As discussed earlier, inventory management software can alert employees on any deviations in stock levels across a retailer's facilities and warehouses. If equipped with eProcurement functionality, such a system can also help automate inventory replenishment when stock runs short, which can help an omnichannel retail business avoid out-of-stock and customer dissatisfaction. For example, such a system can automatically generate a request for quote (RFQ) or request for proposal (RFP) documents based on predefined templates and send them to the supplier. That way, a retailer can ensure its warehouses and stores maintain the required stock levels to fulfill orders and meet customer demands. Automated procurement can provide omnichannel retailers with numerous business advantages, as revealed by Keelvar's research 2023: The Year of Autonomous Sourcing. 89% of the survey participants state procurement automation reduces time spent on manual tasks, 86% believe it helps execute increased numbers of strategic initiatives, and 63% say automation helps make more intelligent procurement decisions. Final thoughts The modern customer interacts with a retail business via various channels, including online, such as websites and social networks, and offline, such as brick-and-mortar stores. However, not all retailers are ready to switch to the omnichannel business model due to its logistics and inventory management complexity. Adopting a robust inventory management system is one of the ways to streamline an omnichannel supply chain. Such a software system can centralize inventory management and tracking across all the company's sales channels, as well as provide demand prediction and automated inventory replenishment capabilities. Developing an inventory management system from scratch can be a challenging yet promising option: such systems support a retailer’s unique workflows and needs and offer superior interoperability. Companies can build IMS in-house or delegate development to third-party retail software experts who can effectively handle coding, testing, maintenance, and other development tasks.
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