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Shareholders Agreement: Checklist & Standard Template

A shareholder agreement deals with two very distinct areas:

  1. What power do the shareholders wish to retain themselves i.e. not delegate to the directors?
  2. How shareholders will deal with their own shareholding

Shareholder agreements are unlike Articles of Association, which are the rules laid down by the shareholders as to how they will allow directors to run their business. Articles of Association are also in the public domain at Companies House and bind all directors and shareholders.

The shareholders agreement is a private document and only binds those parties that sign it (unless you have something called a Deed of Adherence).

Shareholder agreements are essential in times of shareholder upset, they can save time, money and upset, as they lay out clearly how shareholder issues will be dealt with.

Sadly, these “prenuptial type documents” are not often put in place before the shareholders approach the divorce court, yet with foresight and good planning, such documents can be put in place to ensure the shareholders avoid expensive and distracting costs and time by providing contractual processes for disputes.

Whilst we are comfortable with this template, you may like to take legal advice before completion to assist with any local nuances related to your specific position.

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