There persists a common misconception that shareholder agreements are only required for large businesses or corporations. Those involved in the running of small, private or family-owned companies may feel that such formal arrangements are unnecessary and that informal decision-making arrangements are suitable for their needs.
Unfortunately, there are many situations where family or working relationships can break down, leading not only to personal disputes but disruption and harm for your business as well. Having an explicit, written agreement in place can provide certainty and peace of mind when it comes to protecting your company.
Expert Shareholder Agreement Lawyers London
A shareholder agreement is a formal contract between company shareholders which sets out their respective rights and obligations and regulates how they are to perform their role. Commonly, this will include provisions regarding how and when shares can be acquired or sold, how decisions about the running of the company will be made as well as rules about the running of the firm. It is not a legal requirement that a company has a shareholder agreement in place but taking this step can benefit your business greatly. Unlike a company’s articles of association, the provisions contained within a shareholder agreement are private. They do not require to be filed at Companies House and, as such, cannot be read by members of the public.
Why Should my Company Consider Drafting a Shareholder Agreement?
It is vital for every company that the power that comes with owning shares in that business is properly managed and regulated. To promote growth and success, it is essential that a means of control is put in place that meets the specific needs and commercial ambitions of your company.
The benefits of a clearly drafted shareholder agreement include:
- Improved dispute resolution – provisions should be put in place to help quickly and effectively resolve disputes between parties with equal shareholdings should they arise
- Enhanced protection for minority shareholders – such protections can be particularly attractive to prospective investors in your business
- Additional control over the transfer of shares – if one shareholder departs or dies, the agreement can set out explicitly what should happen to their shares
- Clear regulations regarding the management of the company
- Reduced administration costs after an agreement is put in place
Contact Our Shareholder Agreements Lawyers in London
The shareholder agreements lawyers at Nath Solicitors are on hand to provide professional, straightforward legal advice when it comes to preparing and drafting shareholder agreements. Our London-based team have a well-earned reputation for strategic and commercially focused thinking, helping our clients to put in place agreements that work for their businesses. With many years of experience in this area, we can identify potential issues and develop innovative solutions whatever the size and nature of your enterprise. We take the time to understand your priorities, and readily available to discuss your shareholder agreement or any other related issues you may have. Please call Nath Solicitors on 0203 983 8278 or contact us online.
