Shareholders’ Agreements Shareholders’ Agreement drafting from our solicitors in Milton Keynes

The Importance Of Drafting A Shareholders’ Agreement

At Heald Solicitors we’ll make sure you have a robust shareholders agreement covering key matters including the rights and duties of shareholders when they wish to exit the company, restraint of trade provisions, the granting of new shares, the payment of dividends, and what happens in the event of a dispute between the owners.

The agreement will contain specific, practical rules relating to the company and the relationship between the shareholders. This can be beneficial for both minority and majority shareholders should a dispute arise in the future.

Drafting a Shareholders Agreement

We’ll use our experience and knowledge to ensure your shareholders’ agreement contains the provisions you need for a smooth-running business and the protection of your interests. We are aware that when you’re starting out on a new collaborative venture, you’re likely to have a positive and trusting relationship with your fellow shareholders. A well-drafted shareholders’ agreement will help keep things that way, with everyone knowing where they stand. But if there is a dispute further down the line a shareholders’ agreement will provide a way to resolve that dispute, whilst trying to avoid gridlock, which would hinder the company’s ability to operate efficiently.

To achieve this, consider including key provisions such as:

• Issuing and Transferring Shares: Safeguard against unwanted third-party acquisitions, outline the process for handling shares upon a shareholder's death, and establish guidelines for selling shares, or for issuing new shares.
• Tag Along and Drag Along Rights: Protect minority shareholders by allowing them to sell their shares under the same conditions as majority shareholders, and enable majority shareholders to compel minority shareholders to sell.
• Minority Shareholder Protection: Ensure decisions of significance require unanimous shareholder approval, so that minority shareholders can influence the manner in which the business operates, whilst also offering a level of security to those with less than a 50% stake.
• Dividend Policies: Clearly define how profits will be distributed among shareholders.
• Company Management: Determine procedures for appointing and removing directors, the frequency of board meetings, and outline major business decisions, such as capital expenditures and financing arrangements.
• Competition Restrictions: Implement measures to prevent shareholders from engaging in competing businesses, or disclosing sensitive information, or any other activities that may be a detriment to the business.
• Dispute Resolution: Establish clear procedures for resolving conflicts to maintain harmony within the company.

By incorporating all of these elements, your shareholder's agreement will serve as a robust framework for the day-to-day management of your business, resolving any conflicts, whilst being tailored to your specific needs and objectives.

Our Corporate and Commercial solicitors enjoy building a strong relationship with all of their clients, and understanding the complexities of their business, so they can ensure they provide advice that you can rely on.