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Dermot Callinan
Director of business services
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Shareholders agreements

Should your business have a shareholders agreement?

Does your shareholders agreement reflect your current business structure?

We always advise that every business should put a shareholders or a partnership agreement in place, depending on your ownership structure. You may be getting on well with your co-shareholders now, but if there should be a disagreement in the future then it is important to have some protection and agreed procedures to resolve a shareholder dispute.

A shareholders agreement is a simple agreement that can be amended as a business grows and new shareholders are admitted. The agreement is confidential and is not filed at Companies House, unlike Articles of Association which are on public record, and so allow shareholders to keep certain matters between themselves.

Properly drafted (together with a set of matched articles of association), a shareholders agreement will document:

  • matters which require the consent of all of the shareholders, for example borrowing, entry into major contracts, allotting further shares;
  • covenants not to compete with the company;
  • a mechanism for dealing with the exit of a shareholder, including how the value of the shares are calculated and who will be entitled to acquire these shares.

A shareholders’ agreement can also protect minority shareholders where they would not otherwise have protection under company law.

If your company might benefit from a shareholders’ agreement and new articles of association, or if you feel that your current arrangements need updating, the corporate and commercial team at Myers & Co can assist you.

Based in Stoke-on-Trent, Staffordshire, our commercial lawyers have a reputation for providing accurate advice, and dealing with complex problems in an efficient manner.   To find out more, contact us on 01782 577000.

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