In its most basic form, a shareholders agreement is a contract between the shareholders of a company. It is a private agreement between them on how they agree to regulate the relationship between the shareholders themselves.
A shareholders agreement can be an extremely useful ally, supporting the success and growth of your business for years to come by providing certainty, stability and consistency.
- By including rights of first refusal in your shareholders agreement, you can ensure that any shares which are proposed to be sold are offered to the remaining shareholders before they are offered to a third party. This will always give the existing shareholders the chance to keep the shares “in house”.
- Including clauses that offer you the ability to claw shares back from any shareholder who is also a director or employee of the company should they decide to leave can be invaluable – otherwise there is a risk that someone who is no longer part of the business will keep benefitting from your hard work.
- Shareholders agreements can also play a key roll in your estate planning by providing the sorts of cross options which complement the terms of any life insurance policies which are taken out over the life of a shareholder.
Shareholders agreements are flexible and can cover a multitude of matters which are of relevance to your particular circumstances. No two companies are the same and it is therefore important, if the agreement is to be of value, to have an agreement which is tailored to meet the particular concerns and structure of each company.
In order to provide you with more practical and useful information about shareholders agreements, we have produced the Ashtons Legal Shareholders Agreement Guide.
Towards the end of the Guide you will find a checklist for you to use to agree the terms of your shareholders agreement with your fellow shareholders.
The answers to these questions provide us with the information we need in order to have a clear understanding of the issues that need to be addressed.
We will then be able to provide you with a tailored quote for preparing your shareholders agreement – which we will usually do on the basis of a fixed fee.
Useful articles about Shareholders Agreements: