Shareholders' Agreements: Why You Need a Shareholders Agreement Prepared by a Solicitor? Have you ever considered entering a business venture with family or friends? Have you ever been invited to subscribe for shares and invest in a company whose future looks promising and bright? If the answer is yes, then you should also consider a shareholders’ agreement to protect your investment and for this purpose you have to consult with a Shareholder Agreement Solicitor who can take care of all the stuff.
What is it?
A shareholders' agreement is a written contract entered into by two or more parties who are shareholders of a limited company. They simply describe the relationship between shareholders.It is a private document that is not disclosed publicly. The company is guided by a set of articles of association and the shareholders’ agreement. Shareholders' agreements can cover everything from regulating directors, dividends, management of the company and how to move shares from one person to another and dispute resolution solutions. Before embarking on an agreement, it would pay to engage a solicitor to ensure that all elements of the agreement are dealt with and amicably agreed between all parties.
Practicalities
The lack of shareholder agreements can cause costly disputes. These agreements are a good guide for shareholders’ and company directors to review shareholders' rights.
When should it be in place?
A shareholders' agreement should be in place just before or when a company is formed and the first shares are issued. It offers a common understanding from the get-go for all concerned. It should be one of the priorities before the business really takes off.