Shareholder Agreements
No two businesses are the same and so your Shareholder Agreement must be customised and relevant to your particular business. Stacks helps you put together a carefully considered shareholder agreement which covers all potential scenarios that your business may one day face.
Any company starting up will need to give consideration to its overall business plan. This will include putting agreements in place to manage any issues that may affect the business’ shareholders, known as a Shareholder Agreement.
With a Shareholder Agreement, the obligations and rights of the Shareholders are clearly outlined and the procedure for resolving disputes is transparent, meaning that disputes may be managed early and with minimal disruption to your business’ productivity.
As all businesses are unique, the Shareholder Agreement will need to consider the particular needs of your company. A Stacks commercial lawyer can provide advice about issues relevant to your business, and draft or review your Shareholder Agreement.
What is a Shareholder?
When someone buys shares in a company, they become part-owners of the company, known as ‘Shareholders’. As Shareholders, they get a say in decisions taken by the company and they appoint the directors who run the company. The amount of say a Shareholder has in making company decisions will depend on how many shares they own, as will their amount of liability in the event that the company faces financial difficulties.
What issues might be addressed in a Shareholder Agreement?
- How will management decisions be made? For example, will decisions require a majority or unanimous vote by the Shareholders?
- What are the obligations of the Shareholders? What rights do they have in relation to appointing Directors in the company? What information are they to be given access to?
- How are shares transferred among Shareholders?
- What will happen in the event that a Shareholder dies, becomes bankrupt, or can no longer continue their role? What will become of their shares?
- What happens if a Shareholder decides to exit the business? How will the shares be valued in order to determine the exit price?
- How can people in the company acquire shares? Do they pay cash or acquire them in some other way?
- Are there different classes of shares and what rights and obligations are attached to these?
- How and when are Shareholders paid dividends?
- What happens if there is a deadlock or dispute where Shareholders cannot agree on a decision?
- What will happen in the event that the business is to be sold, bought out, or listed?
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