Expert support for your shareholders’ agreement

If you already have a shareholders’ agreement in place, we can help you review and update it to reflect changes in your business or in the law. We offer:

• Thorough legal audits: We conduct a detailed review of your current agreement, identifying any gaps, outdated provisions, or potential risks.
• Amendments for business growth: As your business evolves, your agreement needs to evolve too. We help you make the necessary amendments to accommodate new shareholders, changes in business strategy, or shifts in ownership structure.
• Compliance checks: We ensure your agreement is compliant with the latest regulations, including updates to the Companies Act 2006, and that it complements your Articles of Association.

Our review services give you peace of mind, knowing that your shareholders’ agreement remains relevant, effective, and legally sound.

Negotiating the terms of a shareholders’ agreement can be challenging, especially when multiple parties with different interests are involved. Our experienced solicitors can:

• Facilitate discussions: We act as impartial facilitators, helping you and your co-shareholders reach a fair agreement without unnecessary conflict.
• Advocate for your interests: We ensure that your rights and interests are protected, advising you on key terms and provisions that best align with your business objectives.
• Provide strategic insights: With our extensive experience in corporate law, we offer strategic advice on negotiating clauses related to decision-making authority, shareholder contributions, and exit strategies.

Our goal is to help you achieve a balanced agreement that satisfies all parties and reduces the risk of future disputes.

Despite careful planning, disputes can still arise between shareholders. When this happens, having an experienced legal partner on your side can make all the difference. At Anthony Gold Solicitors, we offer:

• Proactive dispute avoidance: We focus on preventive measures, drafting agreements with clear, unambiguous terms that minimise the risk of disputes.
• Mediation & arbitration services: We aim to resolve conflicts through negotiation, mediation, or arbitration, avoiding the need for costly and time-consuming litigation.
• Litigation support: If a dispute escalates, our litigation team can represent you in court, providing strong advocacy to protect your interests and secure a fair outcome.

We work tirelessly to resolve disputes swiftly and efficiently, keeping your business on track.

At Anthony Gold Solicitors, we believe in putting our clients first. We understand that legal services can be daunting, so we focus on providing:

• Clear communication: We keep you informed at every step, explaining complex legal concepts in plain English.
• Fixed-fee options: Where possible, we offer fixed-fee packages for drafting and reviewing shareholders’ agreements, so you know exactly what to expect with no hidden costs.
• Personalised advice: We take the time to get to know your business and tailor our advice to your specific situation, offering solutions that fit your needs rather than generic recommendations.

Our client-centred approach ensures that you receive not only expert legal support but also a positive, collaborative experience.

The Companies Act 2006 sets out default rules on shareholder rights and company management, but it doesn’t address every issue. For example, the Act outlines voting powers based on shareholding percentages (e.g., blocking rights at 25%, majority control at 50%, special resolutions at 75%), but it doesn’t provide specific guidance on:

• Dispute resolution: How conflicts between shareholders should be resolved.
• Decision-making protocols: Situations where unanimous consent might be needed, such as selling company assets or taking on significant debt.
• Minority protection: Safeguards for shareholders with smaller stakes who might otherwise be outvoted on crucial decisions.

A shareholders’ agreement offers a tailored approach, closing these gaps and providing clarity on issues that statutory rules don’t cover.

One of the main advantages of a shareholders’ agreement is the ability to customise decision-making processes. It allows the shareholders to define which decisions require approval and who has the authority to make them. Common provisions include:

• Reserved matters: Actions that require unanimous consent from all shareholders, such as changing the company’s core business or issuing new shares.
• Enhanced voting rights: Allowing certain shareholders more influence over key decisions, even if they hold a minority stake.
• Director obligations: Setting out specific requirements for directors to seek shareholder approval for actions like entering into significant contracts or disposing of company assets.

This flexibility helps prevent power imbalances and ensures that crucial decisions are made collaboratively, reducing the risk of future disputes.

The Articles of Association are a public document filed at Companies House, which means they are accessible to anyone. This public nature can be a disadvantage when sensitive business arrangements need to be kept private. A shareholders’ agreement, however, is a private contract between the shareholders. It can include:

• Confidentiality clauses: Protecting proprietary information and trade secrets.
• Restrictive covenants: Preventing shareholders from starting competing businesses or soliciting the company’s clients.
• Terms for shareholder loans: Outlining the repayment terms for any financial contributions made by shareholders.

These private provisions offer enhanced protection and help maintain the company’s competitive advantage.

Disagreements among shareholders can quickly escalate and disrupt business operations. A well-drafted shareholders’ agreement includes mechanisms for dispute resolution, helping to avoid costly and time-consuming litigation. Common strategies include:

• Mediation or arbitration clauses: Requiring disputes to be resolved through negotiation or third-party mediation before pursuing legal action.
• Buy-sell provisions: Outlining the process for buying out a shareholder who wants to leave or who is in breach of the agreement.
• Drag-along and tag-along rights: Protecting both majority and minority shareholders in the event of a sale, ensuring fair treatment and preventing forced sales under unfavourable terms.

These safeguards help preserve business continuity and minimise disruptions.

A shareholders’ agreement is not a static document; it can be updated as the business grows and evolves. By setting out clear rules for amending the agreement, shareholders can adapt their terms to reflect changing business needs and priorities. This flexibility provides long-term stability and reduces uncertainty, giving everyone involved confidence in the company’s governance structure.

One of the core functions of a shareholders’ agreement is to set out clear rules for how decisions are made within the company. It defines who has the power to make decisions and under what circumstances. Key provisions might include:

• Voting rights: Establishing voting thresholds based on shareholding percentages (e.g., decisions that require a simple majority, supermajority, or unanimous consent).
• Reserved matters: Specifying critical decisions that cannot be made without the consent of all shareholders, such as:
  • Changes to the company’s core business activities.
  • Issuing new shares or changing share classes.
  • Approving significant contracts or financial commitments.
• Director approvals: Setting obligations for directors to seek shareholder approval before undertaking key actions, such as major asset sales or taking on significant loans.

This clarity helps prevent disputes and ensures that all shareholders have a say in important decisions.

Shareholder dynamics can change over time, and a strong agreement should outline the rules for transferring shares. This prevents disruptions and provides a clear exit strategy for shareholders. Common clauses include:

• Pre-emption rights: Giving existing shareholders the first right of refusal if another shareholder wishes to sell their shares. This helps maintain control within the current group of shareholders.
• Drag-along rights: Allowing majority shareholders to force minority shareholders to sell their shares in the event of a sale, ensuring the deal can proceed smoothly.
• Tag-along rights: Protecting minority shareholders by allowing them to join in the sale if the majority shareholders decide to sell their stake.
• Lock-in periods: Restricting shareholders from selling their shares for a specified time, often used to maintain stability during the early stages of a business.

These provisions help protect shareholder value and ensure a fair process when ownership changes.

A shareholders’ agreement sets the boundaries for the day-to-day management of the company. It provides a framework that aligns the interests of both directors (management) and shareholders (owners), ensuring clear lines of responsibility. Key elements include:

• Director duties & responsibilities: Outlining the role of directors and the extent of their decision-making powers.
• Shareholder involvement in management: Defining the level of involvement shareholders can have in operational decisions.
• Quorum requirements: Specifying the minimum number of directors or shareholders needed to make certain decisions, preventing a small group from making unilateral changes.
• Dividends policy: Setting out how profits will be distributed among shareholders, including any conditions for declaring dividends.

This framework helps establish a balance between effective management and shareholder oversight.

In many cases, shareholders may contribute not just capital but also loans to support the business. A shareholders’ agreement should address the terms and conditions for these contributions to avoid conflicts. Common clauses include:

• Capital contributions: Clarifying how much each shareholder is expected to contribute and any obligations for future funding.
• Shareholder loans: Setting out the terms for loans made by shareholders, including interest rates, repayment schedules, and priority of repayment.
• Debt-to-equity conversion: Providing an option for converting loans into equity under certain circumstances, which can be beneficial for both the company and the shareholders.

These provisions ensure transparency and prevent misunderstandings regarding financial contributions.

Business success often relies on maintaining the confidentiality of sensitive information and protecting the company’s competitive edge. A shareholders’ agreement can include:

• Confidentiality obligations: Ensuring shareholders do not disclose proprietary information, trade secrets, or sensitive business data to third parties.
• Non-compete clauses: Restricting shareholders from engaging in business activities that compete directly with the company.
• Non-solicitation clauses: Preventing shareholders from poaching the company’s clients, customers, or key employees.

These clauses help protect the business from internal threats and maintain its market position.

Even with clear rules, disagreements can arise. A shareholders’ agreement should outline how disputes will be handled to avoid costly litigation. Typical mechanisms include:

• Negotiation & mediation: Encouraging parties to resolve disputes through direct negotiation or with the help of a mediator before taking legal action.
• Arbitration clauses: Providing an alternative to court proceedings, which can be faster and more cost-effective.
• Deadlock provisions: Offering a solution when shareholders reach a stalemate, such as a buy-sell agreement or appointing an independent third party to make a decision.