Shareholder agreements are extremely useful tools for governing the relationship between the owners of a company and minimising the potential for disputes. Such agreements will usually detail the voting entitlement of shareholders, set out what decisions will require unanimity between the shareholders, confirm the dividend policy and provide a mechanism for the sale and valuation of shares when a shareholder wishes to leave the Company, either voluntarily or upon the occurrence of certain events such as insolvency or death of a shareholder.
A shareholder agreement can also contain post-termination restrictions, confidentiality clauses and provide a procedure to follow if an offer for the purchase of the whole share capital of the company is received.
A well thought out shareholder agreement at the commencement of a business relationship often avoids costly disputes at a later stage.
In this podcast, Managing Partner and Head of Company & Commercial, Paul Reader, talks in detail about Shareholder Agreements. Paul discusses what a shareholder's agreement is, why business owners should have one and how they differ from articles of association. The podcast also covers what the usual terms within the agreement are, the best time to put one together plus everything in between!
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