Every business needs Shareholder Agreements

It is certain that at some stage in the life of the business, there will be a need for change of some sort when decisions have to be made and plans put in place. How and when these decisions are made can test relationships and a code of conduct and pre-agreed rules as to how these decisions are made and put in force will help maintain the stability and direction of the business.

When a company is established there will be a set of Articles of Association attached to it. These are more often than not standard documents issued by Companies House that rarely take into consideration the activity or needs of the company but do stipulate certain rules about its conduct as dictated by Company Law.

A Shareholder Agreement is different. It is an agreement between the owners of a company and sets out how they want to run it and how they will deal with certain events that may arise. It is a legal contract between the shareholders that all who sign it must comply with and gives everyone a point of reference and a set of self-made rules for the future.

Successful businesses put in place shareholder agreements to protect the shareholders’ investment in the company, to establish a fair relationship between the shareholders and to govern how the company is run.

Let The Profit Key help you put the rules in place that will help avoid wasted time and the damage that can be caused by common eventualities.