A shareholders’ agreement is a legally binding contract entered between all or some of the shareholders in a company that regulates their rights and obligations and puts in place a framework of how the company should be managed.
A company’s standard constitution and the Companies Act 2006 provide some protection for shareholders, but it is constrained and relying on this alone is not recommended. Without a correctly drafted shareholders’ agreement, shareholders can be left vulnerable, and standard company laws may not allow for matters to be dealt with in the way they intended.
A shareholders document can be private, and there is no requirement to file it at Companies House. Therefore, its content can be kept confidential and provide safeguards for the shareholders.
If you require advice on drafting a shareholders’ agreement, Bookers & Bolton Solicitors can help. Even if you already have an established business, it is never too late to put one in place.
Bookers & Bolton Solicitors dates back to 1893, making us one of the most established law firms in the area, so you can feel confident in our longstanding knowledge and expertise.
Our specialist commercial law solicitors can help businesses create robust shareholder agreements and have the knowledge and expertise to handle various matters and disputes on behalf of shareholders and investors.
We will guide you through the entire process, ensuring it is as fast and efficient as possible, providing practical legal advice with a strong commercial perspective.
Every shareholder agreement should be bespoke. Our experienced commercial law team will work with you, taking the time to understand your business and ensuring you address all the relevant factors.
Whilst there are no set rules on what should be included, we can guide you on the most appropriate points, including items such as:
• Set out the business of the company and how it should be run
• Directors and management – director appointments and board meetings, including quorum required, casting vote, physical venue or other method (such as remote attendance by telephone or virtual online)
• The appointment and removal of directors
• Key roles and responsibilities
• Finance for the company
• Preparation of management accounts
• Accounting – what accounts and financial information are the shareholders entitled to receive?
• Company’s dividend policy
• Transfer and allotments of shares
• Restrictive covenants on shareholders
• Deadlock provisions
• Minority shareholder protections
Even if you are setting up a business with family or friends, disputes are not uncommon and can have a lasting and damaging effect on the business and relationships. That is why a shareholders’ agreement is so important. It can ensure that the company is protected, as well as the relationship between the shareholders.
A correctly drafted shareholder’s agreement can safeguard against disputes altogether or prevent them from escalating to more severe problems, even setting out what should happen should a dispute arise.
Our shareholders’ agreement solicitors can also provide guidance in the following areas:
• Shareholder protection for both majority and minority shareholders
• Reviewing and advising on equity arrangements and valuation mechanisms;
• Shareholder restrictions;
• Share transfer provisions; and
• Procedures for sale of shares.
Our experienced team will provide commercially astute advice, working alongside you to make you aware of the legal implications of the planned agreement and guiding you through the entire process of producing the document.