A well-drafted agreement governing the rights and responsibilities of shareholders or partners in a business helps those involved understand exactly what is expected of them and what they can rely on others to do. As well as apportioning duties and setting out clear financial rights and obligations, the agreement can include set procedures for many other eventualities, including dispute resolution.
A shareholders’ agreement governs the relationship between a company’s shareholders and its directors. This is often a balancing act between the needs of directors to run a company as they see fit and the desire of shareholders to be able to exercise some restraint over the directors’ actions.
A good shareholders’ agreement that has been tailored to the specific needs of a business will provide the structure for good relationships between the parties involved.
It will deal with issues such as the rights of shareholders, when shareholders are entitled to vote on a matter, how a party can be bought out of the business and when shares can be bought and issued.
Shareholder behaviour can also be modified by preventing them having an interest in a rival business, requiring confidentiality, preventing them from immediately selling shares with which they have been issued and a procedure to be followed in the event of a dispute.
We will discuss with you the protections that you need in place and ensure that your shareholders’ agreement allows your business the freedom it needs while regulating issues relating to share transfers, shareholder votes and the issuing of new shares.
While there is no legal requirement to put a written partnership agreement in place, it is always advisable to do so. Without a document in writing that can be referred to, disagreements can easily arise. A written agreement can cover issues such as what powers each partner has and the limit of those powers, duties to be taken on by each partner, administrative responsibilities, the share of ownership that each partner has and how profits and losses are to be shared.
Importantly, the agreement will also detail how someone can leave a partnership, how a buyout can happen, how someone can be required to leave, how the partnership can be ended and a process for dealing with any dispute.
Working with you to put the right agreement in place
At Hutchinson Thomas we have experience in drafting shareholder and partnership agreements for a range of businesses. We will work with you to ensure that the document is tailored to suit your specific requirements and that it covers a wide range of eventualities.
A successful organisation relies on being underpinned by a strong legal framework and we can ensure that you have the necessary agreements in place to allow your business to flourish and grow without difficulties.
Hutchinson Thomas is the first law firm in Wales to be awarded the Law Society Mark of Excellence. The firm and many of our lawyers are recognised year on year in the Legal 500 publication as leading individuals in their field.
If you are setting up a business or a partnership and you would like to speak to one of our expert commercial solicitors, call us on the following numbers or fill in our contact form.