Our experienced Corporate Law team regularly advises on drafting, updating and negotiating shareholders’ agreements for businesses of all shapes and sizes.
Although there is no legal requirement to have a shareholders’ agreement, our advice will always be to put one in place and to make sure it is kept up to date. Unfortunately, we often see the consequences of failing to properly document these arrangements and business owners not planning far enough ahead. This can lead to issues such as:
- Not being able get shares back from employees and other shareholders.
- Shares being transferred to others without consent.
- Decision being made that were not approved by others.
- Shareholdings being diluted by the issue of further shares.
- There being no mechanism to resolve disputes.
- No plans being in place if someone dies or loses capacity.
To try and assist the process we have put together a guide for shareholders’ agreements to help clients understand what these are, to be aware of the issues to be considered, and more importantly, to encourage clients to take the time to put an agreement in place. Here is a link to our guide.
We have also produced a simplified version of the guide to help clients in a hurry to consider the key aspects more quickly which you can find here.
To further assist the process, we have produced a questionnaire which sets out the main questions we will need to ask to be able to draft the agreement for you. This can help clients in agreeing the terms before instructing us and often assists with giving instructions to us. Done well, this can save on costs and speed up the process as you are able to give us clearer instructions from the beginning and limit negotiations.
Rest assured we have experience acting in respect of all forms of shareholder arrangements, including acting for:
- Investors looking to protect their investment.
- Business owners taking on investors.
- Majority shareholders wishing to introduce minority shareholders or employee shareholders.
- Complex share structures with various classes of shares.
- Equal business owners setting out how they will govern each other.
- Protecting a minority shareholder’s interests.
- Entities entering joint venture arrangements.
If you wish to have a shareholders’ agreement put in place or wish to discuss an existing once, please do not hesitate to contact the team who will be more than happy to assist.
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