Why A Shareholders’ Agreement Matters.
A well drafted shareholders’ agreement reduces the risk of future misunderstanding and ensures clarity for all parties on important matters, like exit strategy, conduct and company funding.
What’s In A Shareholders’ Agreement?
Shareholders’ agreements typically include:
- How directors are appointed and removed.
- What actions must be completed with the authorisation of a high percentage of shareholders (such as changing the nature of the business, approving major transactions, senior hires, borrowing or lending money, or significant capital expenditure).
- How the company should be funded.
- How the shares are to be valued, the procedure around the transfer of shares, and how shares will be valued when sold.
- The requirements in relation to the company to hold insurances over the lives of the directors.
- Any restraints on a party who has sold their shares in the company.
- Obligations to sell or buy back shares if an employee leaves the company.
- The process if a shareholder doesn’t perform their obligations to the company, and how these disputes will be resolved.
Address Issues Before They Arise.
A robust shareholders’ agreement enables you to address potentially significant issues before they arise. Our expert commercial team brings real-world, practical experience to drafting, interpreting and enforcing shareholders’ agreements, constitutions, and general company administration.