Is it important to have a shareholders agreement? (video)

23 February 2018 |
by Rachel Gill

Do you have a shareholders agreement in place? Are you aware what the benefits of a shareholders agreement are?

Jo Haigh gives an overview of the importance of such agreement and why they should be implemented.

Shareholders agreements, why would you want one? Well, they are not mandatory, you don’t have to have them, but I’ve spent a lot of my working life dealing with organisations and companies that haven’t had these and often it’s costing an awful lot of money to sort this out.

What it a shareholder’s agreement? It’s a bit like a pre-nuptial, in that you put this together when you love each other. It deals with those matters that you wish to make sure the directors do not deal with, so for instance, it could be selling assets before your approval, but more importantly it deals with how the shares are dealt with between the shareholders themselves. What if one of you dies? What if you have a fallout? What if one of you just wants to retire and go off into the sunset? How will those shares be purchased back?

When should the agreement be implemented? As with any agreement, its best to put this in place at the beginning of the relationship, because unfortunately the courts will not deal with these commercial matters. They will not say one is right and one is wrong and therefore the only way to resolve this is with expensive dialogue between the parties and usually, a third party.

fds has a standard template available, which is completely editable to yours and your company’s requirements, to learn more click here. The agreement might just be the prenup that saves your marriage. To learn more about

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