A shareholder agreement governs the relationship between a company, its directors and shareholders.
The agreement sets out the obligations and rights of shareholders whilst they hold shares in the company, and will often deal with obligations of parties once they cease to be shareholders. Shareholder agreements can be very complex and must be carefully drafted to address the requirements of each individual company.
Although not mandatory, a shareholder agreement is an important document for managing the relationship between shareholders and a company. It operates in addition to the company’s constitution, and provides the flexibility to deal with issues that the constitution does not address.
Shareholder agreements can therefore be an important tool in ensuring the effective management of a company and the company’s business.
Where disputes arise, an appropriately drafted Shareholders Agreement which is tailored to your individual company, can provide clarity to each shareholder in relation to their rights and obligations and can set out appropriate procedures for resolving disputes.
A shareholder agreement will generally address the following matters:
The breadth of issues that can be addressed in a shareholder agreement allows parties the flexibility to cover a variety of circumstances. However, it can also give rise to complex matters to be considered by the parties. It is therefore essential that you seek legal advice in preparing a shareholders agreement that is tailored to your specific circumstances.
The experienced team at Coulter Legal has advised clients on detailed shareholder agreements for large companies with complex shareholder arrangements, and on arrangements between shareholders of small to medium companies. We will guide shareholders through the particular requirements of a shareholder agreement, and draft a shareholder agreement that will provide clarity to both the company and its shareholders.