Why Have a Shareholder Agreement?

Shareholders agreements protect shareholder investments. When starting a new company, there is always an drive to keep costs down and profits up but what happens when your company grows, what happens if you disagree with the direction your fellow shareholders are taking the company in and / or what happens if you wish to sell your shares? All of the above are possible and in time, probable outcomes in the general cycle of business. Shareholder agreements, if drafted correctly and as offered by Francis Wilks & Jones, in a bespoke manner, seek to identify and then define shareholders rights and obligations from inception to conclusion.

Shareholder agreements seek to state who owns what and how and what a shareholder may or may not do with their shares / shareholding within a company. In short, a sufficiently drafted shareholders agreement will cover every business eventuality – shareholders will be clear on their rights and obligations in any given situation before it happens.