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There are many advantages in running your business as a limited company not least the degree of protection from personal liability that this affords.
It is essential that shareholders plan for the future and an agreement between them is usually a good way of doing so. Such a shareholder agreement is confidential to the shareholders and will not be shown on the company’s register at Companies House.
A shareholder agreement can usefully cover the following issues:-
- The areas of business that the company will undertake.
- Circumstances in which further shares can be issued.
- Arrangements for transfer of shares on death/retirement.
- Whether there should be an obligation to offer shares to existing shareholders before selling to a third party.
- Whether there should be circumstances where a shareholder is required to sell shares (for example on ceasing to be an employee of the company or on death).
- Mechanism to be employed to fix the value at which shares should transfer.
- Arrangements for the sale of all the shares in the company should an agreed percentage of shareholders require.
- Procedural issues.
- Arrangements for borrowing, lending, giving guarantees, changing company structure etc.
Taking advice early and putting a shareholder agreement in place can help provide the business with a stable platform for long term success.
For an initial discussion please contact any of our offices or send us a message using the Contact form on the right of this page and we will get back to you as soon as possible.