Need a Shareholder Agreement drawn up?

Limited companies will typically require a shareholders agreement to determine what powers their shareholders have. Like partnership agreements, shareholders’ agreements make clear the roles, responsibilities, and powers of shareholders and can help bring any disputes to a swift close.

Shareholder agreements outline what should happen if a shareholder dispute occurs or the process for what happens to the rights of existing shareholders if more shares are issued.

The main benefits of creating a shareholder agreement, include: 

• Shareholder rights are protected in the agreement
• Resolutions for a dispute
• Potentially more say in the management of a company
• Specific but often limited amounts of information provided from a company
• Confidentiality from third parties

To contact one of our shareholder agreement solicitors, please call us on 0203 007 5500.

A shareholder agreement is entered into by all or some of the shareholders in a company. It regulates the relationship between shareholders, the management of the company, ownership of the shares and protection of the shareholders. Shareholder agreements will also govern how a company is run.

Once a shareholder agreement is signed, it should be legally binding, providing it has included and complied with the key components of a contract: acceptance, consideration and an intention to create legal relations. Consideration is essential within a shareholder agreement. The shareholder purchasing company shares generally meet these terms.

Individuals can enter into them, corporate bodies or a combination of the two. Essentially, any group of shareholders can enter into a shareholder agreement, providing they agree to the terms.

It can be difficult considering the issues that a shareholder may face in particular scenarios. For this reason, we strongly recommend having your shareholder agreement checked by one of our specially trained solicitors.

We aim to have the first draft of a new shareholders agreement with you within 1 to 2 weeks, subject to the complexity of the document.

More complicated shareholder agreements involving clauses such as competition, tag along/drag, and provisions will increase the time required to produce the first draft.

Your solicitor will advise how long it will take to draft your agreement after discussing your requirements.

A thorough shareholders agreement is essential for any company, and the last thing a business needs is a document that leaves scope for imagination or evasiveness.

The cost of a shareholder agreement depends on the type of shareholder agreement. For example, if there are many shareholders, or different clauses required to differentiate between stock types and shareholder types, the price can increase.

To contact one of our corporate solicitors, please call us on 0203 007 5500.