Shareholders’ Agreements
For businesses with two or more shareholders, you should consider implementing a shareholders’ agreement.
For businesses with two or more shareholders, we would strongly urge them to consider implementing a shareholders’ agreement. However, a common question we’ll get asked is: what is a shareholders’ agreement?
This agreement is effectively a contract between all company shareholders to help govern the relationship, rights, rules and responsibilities for each shareholder to abide by. Effectively it ensures all parties are on the same page about what to do in potential events that may arise in the future to avoid disagreements and deadlocks.
What is Covered Within a Shareholders’ Agreement?
It’s important to note that a shareholders’ agreement should be tailored to the desires of the shareholders rather than a boilerplate document. As a result, the ideal shareholders’ agreement will vary from company to company, however, here are examples of some of the questions that a shareholders’ agreement may answer:
This isn’t an exhaustive list as the agreement aims to cover any potential issues that the shareholders deem important enough to warrant creating a legal obligation by including them within the agreement.
How can The Smart Accountants help?
Working with solicitors where necessary, our shareholder agreement experts can prepare this agreement for you, including discussing the various elements, your desires and providing recommendations and advice on what you should include. Often this process will work out as follows:
- Initial Q&A/Checklist (see below)
- First draft provided for review
- Conference call to discuss queries and amendments
- Second draft provided for review
- Conference call to discuss further (if needed)
- Finalised agreement for signing
Download our Shareholders’ Agreement Checklist
The starting point for us to help create the first draft of this agreement is to understand each factor of the business and shareholders that is pertinent to the agreement. Often as well as a virtual meeting, we’ll use a Shareholders’ Agreement Checklist which you can download below:
Shareholders’ Agreements FAQ’s
The Next Steps
If you would like further information on Shareholders’ Agreements and to discuss how we can support you, please get in touch and one of our specialists will be happy to talk to you.
Please call us on 0845 606 9632, email us at team@thesmartaccountants.co.uk or complete the contact form below.