Shareholders Agreements

Typically all shareholders of a private company will enter into a shareholders agreement. It is a private document that exists alongside the company’s constitution or articles of association.

A shareholders agreement is an important foundation for any investment. It offers clarity and protection on a number of issues. It is tailored to suit the priorities and commercial objectives of the shareholders concerned.

Typical matters covered include:

• who has control and how decisions are made
• the transfer of shares between existing and new shareholders
• the issue of new shares by the company
• dividend policy
• arrangements in connection with a departing shareholder
• sale of the business to a third party
• valuation of shares when a shareholder leaves
• availability of up to date financial information in order that shareholders can monitor the company’s performance
• remedies where a shareholder breaches the terms of the shareholders agreement
• competition restrictions on a departing shareholder

A shareholders agreement sets a clear precedent for the company to structure both daily management, as well as significant decision making. Failure to have one in place can result in costly disputes and conflicts which have a damaging effect on the business.

At Linder Myers we will be able to provide you with the practical advice that is tailored to the needs of you as a shareholder. We can also provide advice to meet the strategic needs of the company.

We can assist with any negotiations between parties relevant to the provisions in the agreement. We will draft the shareholders agreement for you, ensuring you are protecting the interests of both yourself and the organisation.