Although there is no legal requirement to have a shareholder agreement, every company with multiple shareholders is well advised to consider having one.
Alongside a company’s articles of association, a shareholder agreement sets out the rules by which a company’s shareholders agree to operate their business and provides the basis of a legal framework between them.
Through a shareholder agreement, a company and its shareholders can determine the procedure for taking important management decisions and safeguard the financial interests of each shareholder and their family.
A shareholder agreement can also help to limit the possible harm that may be caused to a company’s business, particularly if things turn sour. In potentially trying circumstances, for example, a shareholder agreement may provide the framework through which certain difficulties can be resolved, either by providing a mechanism for the resolution of disputes or an exit strategy for disaffected or problematic shareholders.
Some of the issues that are typically dealt with in a shareholder agreement include:
If you have an accountant, they should be your first stop for business advice. If you don’t have an accountant or they can’t help, BuBul has a wide range of experts available. For more advice on shareholder agreements, contact our expert* Rory on LinkedIn.
*We’ve picked experts we know and trust who are good at what they do. All of them will give you at least an extra 30 minutes free advice if you contact them and would then charge their normal prices. They don’t pay to be on BuBul and don’t give us any money from anything they earn as an expert.