Shareholder
Agreements

Shareholder Agreements deal with the following key areas:

• The decision making processes between shareholders
• The transfer of shares – shareholder wishing to leave the company
• The transfer of shares – shareholder death
• The purchase of shares from a shareholder
• Dividend policies
• Sharing of guarantees
• Financial obligations

It is essential that the procedures for all these areas are documented to ensure continuity the business. Should a shareholder’s relationship with the company breakdown, unless the Shareholder Agreement specifies that shares can be purchased from that shareholder, nothing can be done. The individual would keep their shares for as long as they wished, and this could potentially harm the business.

Equally, should a shareholder die and there are no provisions within a Shareholder Agreement for such circumstances, the shares could enter probate. This could result in the shares being passed to a beneficiary of the estate who you would not want to be involved in the business.

Whilst no one ever wants to think either of the above circumstances will happen, unfortunately they do, and the company needs protecting for every eventuality.

Our team at Dawson Radford are experienced in working alongside company accountants and financial advisors relating to any life policies in place, and/or cross option agreements that need to be put into place in respect of life policies.

As well was creating Shareholder Agreements we also deal with amending existing agreements and dealing with issues around incoming and/or outgoing shareholders.