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Shareholders agreements

There are many benefits of implementing a well-drafted shareholders agreement in a business as it will for example, clearly define ownership of the business and identify the business structure being used. In addition, the agreement could include amongst other things, important information relating to directors service contracts and to the disposal of shares.

The clarity that a well drafted agreement could also bring, will generally promote stability within the firm and may well help to avoid costly disputes that might undermine the success of the business. For a confidential discussion in respect of shareholders agreements and the issues that may be concerning you, call us today on 01223 632420 and arrange an appointment.

At Libra Solicitors, we believe that when there is more than one shareholder in a business, it would generally be considered prudent for the business to have a written shareholders agreement. However, the advantages of having a shareholders agreement are unfortunately often only discovered when things go wrong and an effective shareholders agreement, or no agreement at all, has been implemented.

The absence of a shareholders agreement that contains provisions that set out the process to resolve any disputes between the shareholders, could for example lead disputes to be resolved through costly and lengthy litigation. This in turn could be damaging for the company, both financially and in respect of its reputation.

However, a well drafted shareholders agreement, alongside other important documents such as the Memorandum and Articles, could also help to promote good governance within the business and ensure the smooth running of the company. We also believe that the certainty that good governance provides, makes excellent business sense as it project the company’s values and business standards, both within the company itself and to those who deal with it from a business standpoint.

Key issues to deal with

To be properly effective the shareholder agreement should also contain provisions that deal with key issues such as:

  • The appointment and removal of directors
  • The transfer of shares
  • Protection of minority shareholder rights
  • Shareholder voting rights and the right of a shareholder to veto
  • Shareholders rights and responsibilities
  • The different aspects of possible conditions of sale or disposal in respect of the shares themselves

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How we can help

Your business has its own specific needs and at Libra Solicitors, we can help you meet them. Whether we are drafting a bespoke shareholder agreement tailored to the individual requirements of your business, or reviewing the existing agreement to ensure it contain the key information you think should be clearly recorded, we can help ensure your business can conduct business with confidence.

We can also help if you are involved in a shareholder dispute and are contemplating issuing proceedings in the civil courts, or are being litigated against. Our expertise will be focused on helping you achieve the best possible outcome and we will give you clear, practical advice so you know what your options are and can make informed decisions.

We have a proactive approach in preparing our clients’ cases and will act quickly to protect your interests. For example, if we believe that an interim injunction is urgently required, we will explain as to why it is necessary. Should you decide to take our advice, we will act immediately to get the matter before the court where we will put forward a persuasive argument in respect of the application.

Sometimes the option to litigate may not, at the outset of resolving the dispute at least, be available. If this is the case, we will tell you. In respect of shareholders disputes for example, examination of the shareholders agreement might reveal that in the event of a dispute, there is a process to be used in order to resolve it such as mediation. Should this be the case, our expertise in alternative dispute resolution could help you to achieve a positive outcome.

For a comprehensive discussion about shareholders agreements, call us today on 01223 632420 and arrange an appointment. We will ensure that you will get the right advice when you need it most.

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