If you are just starting a company you have established by yourself or with a friend, or taking over one, it is an exciting time. However, if done without taking suitable advice, avoidable complications may result.
Business relationships are risky – fraught with mental stress, financial worries and conflicting priorities. Also, the shareholder’s appetite for risk and risk-taking attitudes generally change over time. Difficulties can arise for these reasons.
What a Shareholders Agreement does:
A Shareholders Agreement is an agreement governing the relationship between the shareholders in a company. It will deal with when and how shares can be transferred and how the company will be managed.
We generally advise our clients to negotiate a Shareholders Agreement as soon as possible after the company is incorporated. In our experience, shareholders are often most closely aligned early on in the business lifecycle.
Working with the company’s constitution:
A Shareholders’ Agreement usually works in conjunction with the company’s constitution. While the constitution itself may cover some similar ground, it usually addresses the procedural aspects and not big picture issues such as exit strategies, board appointments and how key decisions are made between the individual shareholders.
If a disagreement arises over these fundamental issues, and there is no Shareholder Agreement in place for reference, the frequent end result will be a lengthy divisive court action, after which little will be left to argue over.
If you have a company or plan to start one, we strongly suggest that you seek advice on having a Shareholder Agreement. In the long run, you will be glad you went through the trouble.
How we can assist
At Obvia Legal we have much experience in guiding our clients through these tricky negotiations, and to document the agreement between the shareholders.
Our aim is to draft suitable agreements and advise on suitable clauses, to pay close attention to the details now and take preventative action, to minimise or avoid the risk of expensive and costly disputes arising in the future.
Fees and Charges
We understand that for many of our smaller clients cost predictability is essential. To meet that need, we’re happy to offer many of our frequently requested legal documents at a fixed price.
To suit your requirements, we offer a range of value-based pricing models, including:
- Hourly rates
- Capped fees
- Fixed prices
- Staged costing
Please contact us to find out how we can be of assistance!