Shareholders' Agreements

Shareholders’ Agreements

As a business owner, no matter what size you are or what stage of the business’ life-cycle you are at, you may at some point have considered putting in place arrangements to govern the relationship amongst the company’s shareholders. This would be a really sensible move to provide clarity within your organisation.

This is typically done by way of a shareholders’ agreement. At Couchman Hanson, we can help provide you with such an agreement for your business, right from the point of initial consultation, through to the final document in a clear and straightforward way, without any legal jargon.

What is a Shareholders’ Agreement?

A shareholders’ agreement is a legal, contractual agreement between a company’s shareholders that sets out how the company should operate, the roles and responsibilities of each shareholder, and the numerous rights and obligations pertaining to each shareholder. Shareholders’ agreements can vary in complexity and length, depending on the types of provisions you would like to include. We can guide you through this and what is best for you and your company. Here are some examples of key provisions you may typically see included within a shareholders’ agreement:

1. Ownership and Transfers of Shares: Details on how shares can be bought or sold, including any pre-emption rights that give existing shareholders the first opportunity to purchase shares before they are offered to others.

2. Management and Decision-Making: The agreement may specify how major decisions are made and the extent to which shareholders are involved in the day-to-day management of the company.

3. Dividend Policy: Guidelines on how and when dividends will be distributed to shareholders.

4. Roles and Responsibilities: Defining the roles and responsibilities of each shareholder, including any expectations for active involvement in the company.

5. Dispute Resolution: Procedures for resolving disputes among shareholders, which may include mediation, arbitration, or other mechanisms.

6. Exit Strategies: Plans for what happens if a shareholder wants to sell their shares and how the valuation of the shares will be determined.

7. Non-compete and Confidentiality: Restrictions on shareholders engaging in competing businesses and rules regarding the confidentiality of company information.

8. Governance: Details on how the company will be governed, including the composition of the board of directors and any special voting rights.

Why should you have a Shareholders’ Agreement?

• Clarity: it sets out clearly the rights and obligations on the shareholders in your company.

• Rules: a shareholders’ agreement provides the rules to regulate the relationship between shareholders – it can also set out a strong and clear dispute resolution mechanism. This can help to avoid pitfalls and disputes further down the line, which could in turn lead to costly litigation.

• Professionalism: It can be seen as marking you out as an organisation that knows its worth. The company looks commercially astute; this can be particularly beneficial when looking to raise investment, or where shareholders are potentially looking for a clean exit from the company.

• Protections: a shareholders’ agreement can also offer valid protection for minority shareholders in certain situations.

How we can help you?

At Couchman Hanson, we are here to assist you with the process of putting a shareholders’ agreement in place from start to finish. It doesn’t matter what kind or size of company you are, we can assist. Right from the initial consultation to the signing and completion of the agreement, we offer seamless and professional advice.

It is important to have an experienced and skilled corporate legal team on hand to guide you through this process to explain the various provisions within your agreement to you, and to explain the impact this will have on your company and the shareholders as individuals.

The agreement your company may be seeking could be simplistic, or it could be complex, whatever it is, we are here to offer our professional help. We are pragmatic, friendly, and commercially astute – we are aware how important these agreements can be for protecting your company.

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How much will it cost?

To understand your needs and provide you with a draft shareholders’ agreement, the cost is £3,000 plus VAT.

To make it happen - get it touch

If you think a shareholders’ agreement would be beneficial for your company and you would like to find out more, please contact us on 01428 774756. We offer a free initial 15-minute consultation to discuss the kind of agreement your company are seeking and to talk you through the process and next steps.

Once you have instructed us, we will provide your shareholders’ agreement within 21 days.

If you’re unsure whether to call us, check out our client feedback on Review Solicitors.

Our Company Commercial Team