Defining your responsibilities and protecting your rights with a shareholders’ agreement

  • A shareholders’ agreement is invaluable in establishing how your company is run, and the rights and relationships of all shareholders.
  • It must clearly explain what should happen if various issues arise, and give you clarity and certainty.
  • An effective agreement should minimise the risk of a dispute; but if a dispute can’t be avoided, we will resolve it quickly and with minimum impact.

Although a shareholders’ agreement is not a legal requirement, putting one in place is a very wise move. A shareholder’s agreement can set out the company’s activities, the arrangement of the board and senior managers, and how important decisions will be taken. Crucially, it can protect the interests of minority shareholders, for example by giving them a veto on decisions that a majority shareholder might try to push through.

Our corporate team has extensive experience of advising directors and shareholders on all aspects of the legal relationships within a company. Using our expertise and having gained a thorough understanding of your business, we’ll advise you on all the areas your shareholders’ agreement should cover. Typically, these will include issues such as:

  • what happens to shares when a director retires or dies
  • arrangements for transferring shares and issuing new shares
  • how to deal with a deadlock between parties with equal shares
  • how to deal with the resignation, removal and appointment of directors
  • protecting the position of minority shareholders.

It’s important to understand that there’s no such thing as a standard shareholders’ agreement. It needs to be bespoke to you, to address your company’s status and the issues your shareholders want to clarify and make provision for. We’re well known for our skills in tailoring shareholder agreements that meet our clients’ commercial objectives, and provide clarity and certainty. As well as drawing up the agreement, we can also help you in other ways, such as producing reports on your company’s current constitution.

The shareholders’ agreement we produce for you will be carefully drafted to minimise the chances of disputes. Sometimes, however, a dispute becomes inevitable. If that occurs, we will step in, take stock of the situation and resolve it as quickly and amicably as possible, with the minimum impact on your company and its reputation.

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