UNIT HOLDERS AGREEMENT

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At a Glance

A Unit Holders Agreement is a legally binding document that outlines the rights, responsibilities, and obligations of unit holders within a unit trust. While the unit trust deed establishes the foundational terms of the trust, the Unit Holders Agreement provides additional clarity on governance, decision-making processes, and the relationships between unit holders and the trustee.xit the trust, including valuation methods for units and buyout procedures.

Implementing a Unit Holders Agreement is crucial for ensuring transparency and preventing disputes within a unit trust. It complements the unit trust deed by addressing specific operational aspects and providing a clear framework for the relationship between unit holders and the trustee.

For those seeking professionally drafted Unit Holders Agreement templates tailored to Australian law, resources such as Precedents Online offer comprehensive and customisable documents suitable for various trust structures.

By establishing a clear and detailed Unit Holders Agreement, unit holders can ensure a harmonious and efficient operation of the trust, safeguarding the interests of all parties involved.

Why You Need a Unit Holders Agreement

A Unit Holders Agreement provides a structured approach to managing relationships between unit holders in a trust. Without a well-drafted agreement, disputes over control, income distribution, and decision-making can arise, potentially jeopardising the stability of the trust.

With our professionally drafted Unit Holders Agreement template, you can:

  • Clearly define unit holders’ rights and responsibilities
  • Outline decision-making processes and voting rights
  • Establish dispute resolution mechanisms
  • Protect unit holders from unnecessary financial risk
  • Ensure compliance with Australian trust and business laws

INCLUDES

Our Unit Holders Agreement includes essential provisions to ensure clarity, fairness, and legal compliance for all unit holders. The key sections covered in this agreement include:

    • Definitions & Interpretation – Establishes clear definitions for all terms used in the agreement.
    • Unit Holding Structure – Outlines the structure of unit ownership within the trust.
    • Management of the Company – Defines management roles and responsibilities.
    • Unit Holders’ Covenants – Details the obligations and responsibilities of each unit holder.
    • Matters Requiring a Special Resolution of Unit Holders – Specifies decisions that require a majority vote.
    • Execution of Documents – Establishes procedures for signing official documents.
    • Dividends & Accounts – Governs financial distributions and record-keeping requirements.
    • Encumbering Units – Regulates the pledging or use of units as security.
    • Insurance – Ensures the trust and its assets are appropriately covered.
    • Drag Along and Tag Along Options – Protects minority and majority unit holders in sales.
    • Mediation & Dispute Resolution – Outlines steps to resolve conflicts efficiently.
    • Non-Competition & Conflicts of Interest – Prevents conflicts between unit holders and competing businesses.
    • Confidentiality & Mutual Covenants – Ensures trust dealings remain private.
    • Exclusion of Implied Relationships – Clarifies that no additional legal relationships exist beyond the agreement.
    • Term of Agreement & Continuing Rights – Specifies the duration and ongoing obligations of the agreement.
    • Notice & General Provisions – Covers general requirements and formal notifications. 

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