What can a shareholders agreement do for you? It can pick up on issues such as:-
employee shareholders leaving the business;
dealing with offers to buy the company where the shareholders are split on whether to accept;
a shareholder dying suddenly;
board constitution;
rights to information;
non-compete undertakings;
dividend policy.
In fact a good one will do this and a lot more. A company is owned by its shareholders and managed by its directors. In many private companies there is some, if not complete, cross-over between the two – in that the shareholders (or a number of them) are the directors. However there are circumstances in which it is important to differentiate between the two roles - something that is not always easily done when the same person is both a shareholder and a director. A carefully constructed shareholders agreement will make these distinctions – giving both the shareholders and the directors clarity on what their role is and what rights and obligations they have to the company and each other.
A good shareholders agreement will leave the directors empowered to run the business with a view to making profit, while the shareholders will have rights that go to the value of their shares and the ability to guide the really fundamental decisions affecting the company.
The EMW Picton Howell Shareholders Agreement Pack is designed to provide a basic but high quality package of documents to ensure that shareholders in private, owner-managed companies have the basic protections they require. The Shareholders Agreement Pack is suitable for companies in which all the issued shares are ordinary voting shares and is not suitable for companies in which preference, convertible, redeemable other special classes of shares are required. In addition, the Shareholders Agreement Pack is not suitable for companies in which:
a minority of the shareholders are purely investors who do not work in the business;
elaborate “good leaver”/”bad leaver” provisions are required to deal with the transfer of shares by departing shareholders (see Explanatory Note 20 at the end of this document for details of basic leaver provisions).
The pack works on a “flowchart” basis, so that by answering the questions set out in the questionnaire in the order in which they appear, information necessary to produce the most suitable Shareholder Agreement with accompanying Articles of Association for your company can be designed. To access the EMW Picton Howell Shareholders Agreement Pack please speak to our Shareholders Agreement team on 0845 074 2513 or 0845 074 2519 who will arrange for you to access a questionnaire, guidance notes on completing the questionnaire and explanatory notes explaining the issues raised by the questionnaire.
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