Posted by: Glenn Ferguson | Date: 18 February 2013
A Shareholders Agreement (SA) is something that I strongly encourage all my clients who operate a business (either as a partnership or company) to have. When I first see a client about starting a new business, they are often full of enthusiasm and great intentions however, have not given much thought about what could go wrong.
The breakdown of a business relationship is a very stressful time for owners and by simply having a SA in place, you could save a lot of money on legal costs and stress and avoid Court.
The primary aim of the Shareholders Agreement is to resolve any potential issues that will arise in the operation of the business.
It will also typically include:
The Shareholders Agreement, as opposed to your company’s constitution, is more specialised and tailored to your company’s particular purpose, the nature of its business and the aims and wishes of its shareholder’s.
The main aim of the SA is to bring certainty to the business relationship.
In particular, a Shareholders Agreement will:
Prior to preparing the SA, you should speak with all shareholder’s and get an understanding of what you want to achieve. Then, seek the advice of an experienced solicitor who will be able to explain to you the legal implications and then draft the SA for you.
As you can see, there are many issues to consider and an experienced solicitor can help ensure the Shareholders Agreement is tailored to suit you. It is easy to see why a Shareholders Agreement is an important tool in business planning.
If you have any questions relating to Shareholders Agreements, please do not hesitate to contact me.