Shareholders' Agreement Solicitors

Shareholders and Directors are vital components of any company, with many responsibilities and legal obligations to fulfil.

A shareholders' agreement is crucial for managing expectations, preventing disputes, and ensuring smooth business operations.

For many years, we have worked with many companies on their shareholder agreements and working with the shareholders themselves to help resolve any disputes that may arise.

Services provided by our shareholders' agreement solicitors include:

• Discussing your requirements and what you need from your shareholder agreement
• Drafting your corporation shareholder agreement
• Negotiating terms with solicitors for the other parties
• Arranging for the shareholder agreement to be executed

Speak to our shareholders' agreement solicitors today

Need help with drafting or amending a shareholders' agreement? We have specialist solicitors in Southampton, Portsmouth, Fareham, Chandler's Ford and Waterlooville.

How our shareholders' team can help you

Discussing your requirements and what you need from your shareholder agreement

Discussing your requirements for a shareholders agreement involves outlining your expectations and terms for your business and its shareholders. This agreement defines how decisions are made, profits are shared, and disputes are resolved. It's a crucial document to provide clarity and prevent conflicts.

Our solicitors can help by facilitating conversations between shareholders, ensuring everyone's needs and concerns are addressed. We will simplify all the complicated legal jargon, making the discussion accessible to all parties. This ensures that the agreement is transparent, fair and protective of everyone's interests.

Drafting your corporation shareholder agreement

Drafting a corporation shareholder agreement involves creating a written document that outlines the terms and conditions of the relationship between shareholders. This agreement addresses important aspects like decision-making, profit distribution, and dispute resolution within the company.

We can help simplify the complex legal terms, ensuring the agreement is clear and understandable for everyone involved. Our solicitors will work closely with shareholders to tailor the agreement to the specific needs and goals of the corporation. Our involvement ensures the document is legally sound and compliant with the law.

Negotiating terms with solicitors for the other parties

Negotiating the terms of a shareholder agreement with solicitors from other parties is where we start finalising the key details of the agreement. This collaborative process aims to ensure that the document reflects the interests and concerns of all shareholders.

Our shareholders' agreement lawyers play a crucial role in facilitating these negotiations. Our legal expertise can help navigate discussions and ensure that the terms align with your business goals. Our role includes:

• Advocating for your interests.
• Promoting fair and transparent terms.
• Working towards a mutually beneficial agreement.

Arranging for the shareholder agreement to be executed

Arranging for an agreement of shareholders to be executed is the formal process of signing and legally binding all parties to the agreed terms. Our solicitors will guide you through the execution process, ensuring that all necessary legal requirements are met and oversee the proper documentation of signatures.

We will ensure the agreement is executed correctly, minimising the risk of future disputes. Engaging a solicitor in this phase ensures a smooth and legally sound execution of the shareholder agreement, providing security for your future business relationships.

Shareholders' agreement FAQs

What is a shareholders' agreement?

A shareholders' agreement is a written document that outlines the terms and conditions agreed upon by individuals owning shares in a company. This agreement clarifies important aspects of their relationship, including decision-making, profit distribution, and conflict resolution.

It serves as a blueprint for how the business will be run and helps prevent misunderstandings among shareholders. This legally binding document is tailored to the company's specific needs, providing a framework for a secure and well-regulated business environment.

What should be in a shareholders' agreement?

A shareholders' agreement should include key details like decision-making processes, profit distribution, and dispute resolution procedures. It defines the roles and responsibilities of shareholders, outlines the company's direction, and addresses potential conflicts.

There are a range of shareholder agreements that serve different purposes. For example, common items to include in a minority shareholders' agreement include:

• Bringing in a third party (mediator) to resolve disputes
• Including a right for a minority shareholder to have their shares bought out
• Controlling the transfer of shares
• Valuing shares on exit

A shareholder purchase agreement may include:

• The parties involved in the agreement 
• Information on the company selling shares
• The purchase price of the shares
• Terms and conditions relating to the sale and purchase of shares in a company

Common items to include in a joint venture shareholders' agreement include:

• The purpose of the venture
• The division of roles between each party
• The division of shares
• How profits and losses will be split
• Who will own the company's assets

You can also include specific clauses in your shareholder agreement, for example:

• Non-compete clauses – This prevents specific shareholders from creating companies which directly compete with the company while they are active shareholders.

A shareholder's agreement also covers share transfer procedures, confidentiality, and mechanisms for resolving disagreements. It can also incorporate provisions for unforeseen events like the death or incapacitation of a shareholder.

Why have a shareholders' agreement?

A shareholders' agreement is crucial for setting expectations, preventing disputes, and ensuring a smooth business operation. This legally binding document provides a clear framework for running the company, protecting the interests of each shareholder.

The agreement can also address unforeseen circumstances and set the rules for share transfers. Overall, a shareholders' agreement ensures everyone is on the same page about the running of the business.

What happens if there is no shareholders' agreement?

Without a shareholders' agreement, businesses rely solely on default company law, which may not specifically address your shareholders' concerns.

The absence of a shareholder's agreement can lead to disputes, as no defined rules are set out to clarify roles, decision-making, and profit distribution. Without clear guidelines, it may be difficult to resolve disputes, potentially harming the company and its operations. 

Complications can also arise when there are no plans for unexpected events, such as a shareholder's departure or death. 

A well-crafted shareholders agreement is crucial to prevent uncertainties and safeguard the interests of the business.

Who should enter into a shareholders' agreement?

Any individuals or entities owning shares in a company should enter into a shareholders' agreement. Whether your business is a start-up or an established company, having this agreement is essential to define roles, responsibilities, and decision-making processes.

It is particularly valuable when there are multiple shareholders to prevent conflicts, ensure transparency, and provide a clear guide for the company's operation.

All stakeholders will benefit from a well-crafted shareholders' agreement tailored to the specific needs and goals of the business.

Speak to our shareholders' agreement solicitors today

Need help with drafting or amending a shareholders' agreement? We have specialist solicitors in Southampton, Portsmouth, Fareham, Chandler's Ford and Waterlooville.