Shareholders’ Agreement
At Askews Legal LLP our Company Law Solicitors can draft, review, and update your organisation’s Shareholders’ Agreement. To protect your company’s best interests, your Shareholders’ Agreement must be carefully tailored to meet the requirements of your business, as this will ensure that they are easily understood, relevant, and legally watertight. Our Company Law Solicitors have a robust reputation for drafting highly effective Shareholders’ Agreements for companies in Coventry and Warwickshire and beyond.
We are a diverse, multi-lingual law firm that uses best-in-class technology to provide clients with streamlined, modern, and highly effective employment law advice and representation. Our years of experience in company law means we have a robust reputation for excellence with the UK’s best Barristers and Queen’s Counsel, accountants, and valuers who will when needed, bring additional support to our Corporate Law Department.
Below are answers to some common FAQs concerning Shareholders’ Agreements.
What is a Shareholders’ Agreement?
A Shareholders’ Agreement is a legally binding contract between some or all of the shareholders of the company. It sits alongside the Articles of Association and provides a framework for managing all aspects related to owning shares in the company. This includes (but is not limited to):
- How the company will be run.
- The rights of shareholders (and different classes of shareholders).
- How disputes between shareholders will be resolved.
A Shareholders’ Agreement can also provide a framework for other company documentation such as a Director’s Service Agreement.
Why do I need a Shareholders’ Agreement?
At the start-up stage company members often consist of friends and relatives. Because it is difficult to imagine the idea of legally formalising these relationships many new companies neglect putting in place a Shareholders’ Agreement. This, however, can prove disastrous, especially if a deadlock situation develops. No matter how strong the personal relationships between shareholders are, disagreements can occur. Without a Shareholders’ Agreement, you could risk destroying your family relationship/friendship and may end up fighting a costly and stressful legal battle.
Having a Shareholders’ Agreement in place will also show investors and other stakeholders that your company is well organised with open lines of communication and clear dispute resolution processes and procedures in place.
What is included in a Shareholders’ Agreement?
Our Company Law Solicitors will take the time to understand your organisation’s market sector and unique needs and draft an agreement that reflects their discoveries.
A well thought out Shareholders’ Agreement will contain:
- A statement of both majority and minor shareholders’ rights and responsibilities.
- Steps to regulate how shares will be bought and sold.
- Principles and policies related to the running of the company.
- Protective provisions for minority shareholders including details of their voting rights.
- Policies and procedures covering dilution rights.
- Information regarding the payment of dividends.
- Intellectual property assignment information and policies.
- A disputes resolution process, including what happens if a deadlock situation arises.
Can a Shareholders’ Agreement help avoid deadlock?
If your company is owned by an even number of people a disagreement may lead to a deadlock situation. This will stop the organisation from moving forward and may lead to Court proceedings.
One of the main advantages of a Shareholders’ Agreement is that a clear disputes resolution process is set out to deal with deadlock situations and resolve them before the day to day business and reputation of the company is negatively affected.
Why choose us?
Our Company Law Solicitors have been advising business owners throughout the West Midlands for many years. We are proud of our personal service to all our clients and where possible we are always available by phone and will respond to your email within 24 hours. As a full-service law firm, we can also provide advice on other matters such as commercial property and disputes resolution.
We are focused on results and achieving them in the swiftest, most cost-effective way possible. Our Company Law Solicitors will take care of your legal concerns so you can concentrate on your organisation’s future growth and prosperity.
To talk to us about creating a Shareholders’ Agreement, please call us on 02476 231000 or email enquiries@askewslegal.co.