A Shareholders Agreement is an agreement between all or some of the shareholders of a company. Its purpose is to protect the shareholders’ investment in the company, to establish a fair relationship between the shareholders and govern how the respective company is run.
- The shareholder’s rights and obligations.
- Regulate the sale of shares in a respective company.
- Provide an element of protection for minority shareholders and the company.
A minority shareholder only has limited power to block shareholder decisions and define how important decisions are to be made in a company. When a Shareholders Agreement is in place, however, the rights of a minority shareholder can be highly protected. Such Agreement works in conjunction with the company’s Articles of Association, but a Shareholders Agreement gives shareholders greater protection than may be provided by the Articles of Association alone because companies are often set up quickly and efficiently without costing a lot.
Standard Articles of Association will not include much detail regarding protective provisions for shareholders (either majority or minority) or define the limits of their responsibilities as well as the director’s obligations. Even though there is no legal requirement to have a formal Shareholders Agreement, every company with more than one shareholder is well advised to have one.
Our professional team have legal advisors and Lawyers that can assist you with the drafting of a Shareholders Agreement which will be tailored to your needs of your company allowing you to protect your rights either as a majority or a minority shareholder.
Contact us today for a quotation or alternatively email firstname.lastname@example.org for further information.
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