Why you should have a carefully drafted shareholders agreement.
We were asked to prepare a number of shareholder agreements for various companies which had been set up between 6 different shareholders all with varying holdings in the different business entities. The main business of the companies was the placement of tradesmen and professionals within the construction industry although this could have been extended to other professions upon agreement by all relevant parties.
As part of one of the shareholder agreements it became clear that the company needed to have intergroup agreements with some of its other group companies due to the way in which the business had been organised.
We prepared the necessary shareholder agreements and we also prepared the other necessary inter group agreements between the various group companies.
The issues for resolution when dealing with multiple shareholders centred primarily on the loans made by various shareholder directors to the company and when those would be repaid in addition to the financial controls and framework governing company expenditure.
The shareholders also wanted other matters to be expressly dealt with including the following:
Further, given that these were individual shareholders we also had to cater for what would happen with the shares of a particular shareholder upon his death/bankruptcy.
There were also other agreements which followed from the shareholders including consultancy and directors service agreements which we helped to prepare and put in place.