A Shareholders' Agreement is a business management and ownership arrangement between the owners and officers of a company (and, we recommend, the company itself) that will regulate the way that a company is owned, controlled and trades. A Shareholders' Agreement supplements the company's constitution (normally its Memorandum and Articles of Association), and the engagement terms of its senior employees.
Shareholders refers to the company’s ownership, the terminology would be different for more exotic corporations e.g. Company Limited by Guarantee, however the same product would still apply.
The benefits of a Shareholders’ Agreement include:
- Letting everyone know where they stand
- Encouraging investment, including investment of involvement
- Increasing stability in management
- Discouraging argument - many very costly disputes have been avoided by clear Shareholders’ Agreements entered into at the outset
- Increasing profit through focus.
A Shareholders’ Agreement will have provisions dealing with:
- Investment terms
- Dealing in business ownership, especially exit strategies
- Shareholders' involvement in other businesses.
Our packaged internet sold product assumes that our clients will have already understood the benefits and implications and will have decided to participate in a Shareholders’ Agreement prior to their decision to buy our internet Shareholders’ Agreement product.
There will also be other provisions applicable to the engagement of senior executives (e.g. their basis of engagement, hours of work, sickness and other policies) which would not normally be appropriate to be covered in a Shareholders’ Agreement, but which may be very relevant to the overall structure of an enterprise. With this in mind, you may also wish to consider our Contractor Contract and Employment Terms products.
How long will it take?
Our work from initial instruction to finalising the form of agreement generally takes about 7-10 working days.
Our work for you will include:
- Taking your instructions
- Drafting Shareholders’ Agreement
- Drafting minutes setting up the Agreement
- A Guidance service.