{"id":2537,"date":"2022-02-16T10:17:56","date_gmt":"2022-02-16T10:17:56","guid":{"rendered":"https:\/\/kirkwoodwilson.co.uk\/?p=2537"},"modified":"2022-02-16T10:17:56","modified_gmt":"2022-02-16T10:17:56","slug":"shareholders-agreement-what-are-shareholders-funds","status":"publish","type":"post","link":"https:\/\/kirkwoodwilson.co.uk\/shareholders-agreement-what-are-shareholders-funds\/","title":{"rendered":"The importance of a shareholders\u2019 agreement"},"content":{"rendered":"\n
Some of the questions we are most frequently asked nowadays are around the subject of shareholders\u2019 agreements so we thought today we\u2019d share with you a little bit of our knowledge and thoughts.<\/p>\n\n\n\n
Company Law states shareholders who: <\/p>\n\n\n\n
This may not suit all business situations, especially where you have two or more founders holding equal share capital or a group of owners with varying amounts of capital, some of whom are directors and some who are not, but who are all working together for the company\u2019s success.<\/p>\n\n\n\n
A shareholders\u2019 agreement is entered into between all or some of the shareholders in a company. It governs the relationship between the shareholders, the management of the company, ownership of the shares and the protection of the shareholders. They also help dictate the way in which the company is run.\u00a0<\/p>\n\n\n\n
A shareholders\u2019 agreement can help define how a business makes decisions to the benefit of all owners and is recommended where:<\/p>\n\n\n\n
Typically it is seeking to deal with the three \u201cD\u2019s\u201d of death, disability, and disagreement. It also regularly helps advise over the retirement of a director or the buying back of shares.\u00a0\u00a0<\/p>\n\n\n\n
This is not a comprehensive list as each situation is different, but it may help you collect the thoughts of all shareholders before you draw up an agreement.<\/p>\n\n\n\n
Over the years many clients have strayed away from an agreement due to the perceived expense of setting the proposal up in the first instance. Our view is that a shareholders\u2019 agreement is an essential document for any limited company and an equitably drafted agreement should provide comfort to all parties to the agreement. We have seen many instances in the past where specific scenarios would have been much better dealt with given the intervention of an agreement and in our opinion the benefits far outweigh the costs.<\/p>\n\n\n\n
There really is no bad time to set up a shareholders\u2019 agreement, so please get in touch if you need help in planning for an agreement, especially where there are several shareholders, a new company is being formed, a shareholder wants to sell their shares or pass them to their children, someone is nearing retirement, or the company has borrowed money from a shareholder. <\/p>\n\n\n\n
We will be happy to assist with share and company valuations and putting the shareholders wishes into an agreement with our local, recommended solicitor.<\/p>\n\n\n\n