A shareholders agreement is a document used by the founders of a new company to clarify roles, how much time each party will dedicate to the business, how disputes are resolved and what happens when one partner wishes to leave.
There is a saying, you can do business with your friend but can you do business with their husband/wife? Good friends find they can't work together or have a falling out, circumstances change and a founder needs to sell, or a founder doesn't put the agreed amount of effort into the business. All of these circumstances can have very messy endings that can be avoided by having a shareholders agreement. It is effectively a pre-nup for your business! It is much easier to agree on exit strategies when everything is running smoothly, rather than trying to work out issues in a crisis mode.
Obviously if your company has only one shareholder then you don't need one. However, if your company has two or more shareholders then it could be very advisable to get a solicitor to draw up a share holders agreement.
A shareholders agreement will usually cover the following standard topics:
Remember that this is just a guide only and there is a lot of room for differences in the standard topics. Depending on your circumstances you may only want to cover some of these and include some custom sections yourself.
eCompanies provides new companies with 2 or more shareholders an optional basic agreement. If you need to remove/edit any of it or you want to add clauses that aren't covered then we highly recommend you seek legal advice. A lawyer can also advise you with your circumstances in mind and their work provides an additional layer of protection with their indemnity insurance. Keeping that in mind, something is better than nothing and you may want to customise it yourself and take on the risks that that entails.
If you want more information or need legal advice we can arrange a free, no obligation, 15 minute phone call with our friends at LegalVision. To do so click Book Now
The information on this site is of a general nature only and does not constitute legal, tax, commercial or other professional advice. You must seek your own advice in relation to your particular circumstances before acting. View our full terms & conditions.