Shareholder Agreements

Shareholder Agreement Solicitors in Manchester, Blackburn and Lancashire

A shareholder agreement is a contract between the shareholders of the company and regulates the rights of the shareholders.  It fulfils a similar role as a partnership agreement.  The Shareholder agreement is not registerable at Companies House and as such it has the advantage of being private. It usually contains detailed provision on the decision making and voting process, transfer of shares, dividend policy and any other matters which the shareholders wish to regulate in a contract.

The key advantage of having a shareholder agreement is that it helps prevent complains of unfair prejudice since the exit strategies are detailed within the agreement as is the shareholder’s right to be involved in the decision making process.

 

What is covered in a Shareholder Agreement:-

  •          The business of the company
  •          The day to day running of the company
  •          Shareholder dividend policies
  •          Appointment and removal of directors
  •          What happens if the shareholders fall out
  •          Restrictive covenants placed on shareholders
  •          Intellectual property
  •          Borrowing money
  •          Spending Limits
  •          To whom shareholders can transfer their shares (and to whom they cannot)
  •          Issuing new shares

 

Documents required for a shareholder agreement

The types of documents that are required to implement shareholder agreements include:

  •          Shareholder agreement (or investment agreement; subscription agreement or joint venture agreement)
  •          Articles of association
  •          Board minutes
  •          Shareholder resolutions
  •          Companies House forms

 

Timings and the cost of a shareholder agreement

Once you have an idea of the points and issues you want to include in a shareholder agreement, the shareholders agreement itself (together with the supporting documentation to implement the arrangements) can be produced in a few days.  Timing can be affected by any points and issues that need to be negotiated between the shareholders.

Please call to speak with one of our specialist corporate lawyers today