Over the last few months, LPF has been engaged to act in some shareholder disputes.
To minimise the risk of shareholder disputes, we highly recommend that all companies have a shareholder agreement prepared by solicitors and have the agreement regularly updated.
What is a shareholder agreement?
A shareholder agreement is a legally enforceable contract between shareholders of a company. It sets out how the company should be operated as well as the rights, obligations and liabilities of each shareholder.
Who needs it?
Any company with more than one shareholder should obtain a shareholder agreement to ensure their rights are protected and to avoid disputes.
What are the benefits?
Having a shareholder agreement is essential for the smooth operation of a business, in particular how to resolve disputes. It will set out shareholder rights in relation to:
- Loans and repayment
- Significant capital expenditure
- Access to books and records
- Buyout
- And significant decisions that require the votes of shareholders.
What should be included?
Your shareholder agreement can be tailored to suit your company, but here is some essential information to include:
- Business management and administration
- Entry and exit of shareholders
- How values of shares are to be determined
- Director guarantees and who is required to provide them
- Business succession plan and funding arrangements
How do I get one?
If you need a shareholder agreement drafted for your company, Level Playing Field Lawyers are here to help! We have extensive experience in preparing airtight shareholder agreements that are enforceable and protect the rights of all shareholders.