How can I minimise the risk of falling out with my other shareholders?
Whilst there is no legal requirement to have one, a Shareholder Agreement provides a level of protection for the parties involved in the ownership of the company against the actions of the other shareholders, whether minority, majority or equal shareholders.
Key points of a Shareholder Agreement:
- Agrees the basis for important decision making
- Defines a procedure for the resolution of disputes
- Confirms the powers of the shareholders in the company individually or in concert
- Prevents situations where changes in one shareholder’s personal circumstances can have an effect on the company or other shareholders within the company
- Sets out the limits and procedures for how the company is to be operated
- Provides a framework for exit strategies for the shareholders
- Safeguards each shareholder’s financial interest in the company, and the interests of the shareholders’ families in the event of the death of a shareholder.
