fbpx

Shareholders Agreements

We are here to help with all your business and commercial law needs.

We can provide you with effective commercial law legal advice.

Our fast, reliable and efficient service is helpful and friendly.

We offer sensible and competitive legal fees.

Operating a Company – Shareholders Agreements

A company is a separate legal person from the people who own and run it. The owners are the shareholders. The people running it are the directors. The shareholders always have a degree of control over the directors but very often, they are the same people who have to act in two separate capacities.

Decisions by the shareholders are usually made by resolutions passed by a simple majority (over 50%) of the shareholders. It is important to identify the rights of the shareholders and how they should treat each other while they remain owners of their shares.

Problems can arise in a number of circumstances such as:

  • How a shareholder who is leaving can sell his shares and to whom
  • How the remaining shareholders pay a departing shareholder if they are buying out his or her shares and for how much
  • Deadlocks between directors or shareholders
  • A majority wanting to take steps which would prejudice the minority
  • A disagreement on whether any particular shareholder should be a director or which director, if any, is to be in overall charge
  • What to do in the case of one director shareholder misbehaving

We always advise that the shareholders of any company, and particularly a small one, enter into a shareholders agreement governing how these things are to be done. For example, the agreement can require a higher percentage majority or even unanimity for some important decisions such as changing the nature of the company’s business, its name or the classification of its shares. It can also include “drag and tag” provisions where the shareholders are made a good offer for the purchase of the company which a minority do not want to accept.

The shareholders agreement is not a public document and is not registered at Companies House. It can avoid a lot of difficulty and even remove the need for litigation if there is a serious problems.

If you are a shareholder in a company, contact us today on 0800 3 10 11 12 or online for advice on what a shareholders agreement can do for you.

Latest Articles About Commercial Law

Bank Fraud and Customer Confidentiality – Guideline High Court Ruling

Banks and other financial institutions are keen to assist in uncovering fraud and routinely submit to court orders requiring information...

Maker of ‘Shapewear’ Jeans Blocks ‘Rip-Off’ Product from the Market

A High Court case concerning a novel variety of ‘body-enhancing’ jeans showed how intellectual property lawyers are always there to ensure your rights are not trampled upon.

Neglecting Environmental Protection Measures is No Way to Save Money!

Businesses in financial trouble may be tempted to save money by giving low priority to compliance with environmental protection laws.

Compromising On Disputes is Usually Best – But Be Careful What You Sign!

Compromise agreements require very careful professional drafting so that all sides fully understand exactly what they are signing up to.

Why Use Seatons?

  • Practical sensible help and information
  • Fixed, competitive and affordable prices
  • We care about you and fight for you
  • Regulated by the Solicitors Regulation Authority
  • We can help resolve your issue quickly & easily

Covid19 Information

WE ARE STILL OPEN FOR BUSINESS HOWEVER, OUR FRONT DOORS WILL BE CLOSED TO THE PUBLIC UNTIL FURTHER NOTICE. For us all to be as safe as possible, our preference will be to interact with clients by telephone, email and/or zoom meetings ONLY. We would ask that if you have to drop any papers off at our offices, you use our Post Box unless you need anything copying, in those cases please knock the door and one of our receptionists will deal with you at the front door but only if you are wearing protective face coverings. If you require further assistance then a member from the relevant department will telephone you thereafter to discuss. We hope you understand that this is to safeguard you, our staff and to limit as much contact as possible. We may take a little longer to respond to enquiries and deal with matters. Please bear with us. FOR MORE INFORMATION CLICK THE BUTTON BELOW.