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Do You Need a Shareholders’ Agreement? FREE Seminar

Posted by: Olexandr Kyrychenko
Posted in: Commercial solutions
Date published: 14/01/2019

What is a Shareholders’ Agreement? 

Put simply ‘Shareholders’ agreement with the company. A Shareholders’ Agreement is usually drafted so that it dovetails with the Articles of the Association. 

The big question is, do you need one? 

If there is more than one shareholder in your company, it is highly advisable. Shareholders’ Agreements are put in place and hopefully avoiding disputes and costly litigation in the future. For example, if a shareholder in a Company acts in a dishonest manner then.  

When should you consider putting a Shareholders’ Agreement in place?

You should investigate the potential benefits of putting together. However, the following 5 scenarios are common triggering factors: 

5 Typical Scenarios:

1. At the moment, what do you think about your roles going to be? The Shareholders’ Agreement can set this out clearly.
2. Decision making – the bridge companies need a day in the future. be involved in as well.
3. What are the rules around issuing new shares? An issue of the title of a shareholder will be an unanimous decision. However, what a-founder might want to be less than a unanimous decision.
4. A third party is investing money for a stake in your business (effectively the Dragon’s Den-type scenario). In this case, I would like to protect my financial stake. If someone wants to buy the entire business, and if they do not buy the business, they must agree to sell, the minority can all sell out together.  
5. A key employee is being reimbursed or rewarding their loyalty. In this scenario, they should cease to be an employee. If you have employees who are also shareholders, you may want to share the ‘vest’ over time, for example, one, three, three. 

Will an ‘Off-The-Shelf’ Solution Do?

A common question is a standard form of Shareholders’ Agreement. The short answer is, each one is drafted specifically for the situation at hand. For example, a situation where a group is holding a majority stake. However, Shareholders’ Agreements to often have provisions in your account; A requirement of the commitment of the key strategy and expenditure; and, Restrictions of shareholders acting in competition. 

This can be an exhaustive list and Shareholders’ Agreement. Every situation requires careful thought, and it is not recommended for the purpose. 

Upcoming Seminar: Planning for the Future 

IMD Solicitors ‘Corporate Commercial Team and Shareholders’ Agreement. Entitled: Agreement on the Future Through the Shareholders’ Agreement, the seminar takes place in central London on the 7th of February, 2019. Places are on the seminar are limited. 

Book here: https://imd-shareholders-agreements.eventbrite.co.uk 

Further Advice

To discuss the Business Partner, Olexandr Kyrychenko at o.kyrychenko@imd.co.uk or call at 0330 107 0106. 

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.