Why have a Shareholder Agreement? Part 5

Continuing the series of examples of important provisions in a Shareholder Agreement. 8. Restrictive Covenants Most shareholders in companies would rather that their fellow shareholders did not:- disclose confidential information to third parties set up or carry on a...

Why have a Shareholder Agreement? Part 4

Continuing the series of examples of important provisions in a Shareholder Agreement.  6. Valuation of shareholding Many disputes between shareholders arise over the issue of how to value shares, in situations where a transfer or disposal is to happen. It is therefore...

Why have a Shareholder Agreement? Part 3

Continuing the series of examples of important provisions in a Shareholder Agreement. 4. Important decisions It may be desirable that the normal company law framework and standard articles of association are overruled so that the agreement of all the shareholders (or...

Why have a Shareholder Agreement? Part 2

Continuing the series of examples of important provisions in a Shareholder Agreement. 3. Sale of Shares General Without any agreement otherwise, a shareholder can sell their shares to anyone. For example, in the event of a dispute they could sell them to a competitor....

Why have a Shareholder Agreement? Part 1

A Shareholder Agreement will set out an agreed position on what is to happen in a variety of situations which will or may arise in the course of the shareholder relationship. The first answer to the question ‘why have a Shareholder Agreement’ is that to create one,...

What is a Shareholder Agreement?

A shareholder Agreement is a legally binding arrangement entered into between each of the shareholders in a company by which they agree how their relationship as shareholders will be regulated. It is possible to form a new company with others or to join an existing...