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Shareholders Agreement

If you have a corporation you know that you will have shareholders that must be addressed. When you have a Shareholders Agreement your company can regulate any relationships that your company has with shareholders, as well as the company. One of the main things that a Shareholders Agreement will put forth is how everyone wants to run the business. A most important clause in any Shareholders Agreement is what will happen if the shareholders can’t agree on a matter relating to the company. If the shareholders are deadlocked the company won’t be able to progress forward, so having a Shareholders Agreement will ensure that a solution has already been considered.

When you have a Shareholders Agreement the responsibilities and obligations of the shareholders will be spelled out in writing. If the shareholders should have a falling out your company will have already addressed this issue when a Shareholders Agreement is in place. Your company won’t be involved in any expensive legal fees because the matter will have already agreed on a solution.

The shareholders’ voting rights in a limited company are relative to the number of shares that they each hold. Whoever has more than fifty percent will be in control of the company and its daily running. If anyone wants to change special matters within the constitution of the company a seventy-five percent or more shareholders voting rights are necessary. If this division is not accepted by the shareholders they could choose to change this voting requirement. To accomplish this they would use the Shareholders Agreement as it can be customised to meet the company’s needs and wishes.

A DIY Legals shareholders template can suitably be used by individuals or businesses that are limited by shares. There are several custom clauses that can be used in our Shareholders Agreement:

  • Definitions and Interpretation
  • The business of the Company
  • Directors
  • Accounting and Other Matters
  • Company Dividend Policy
  • Status of This Agreement and The Parties’ Obligations
  • Minority Protection
  • Promotion of the Company’s Business
  • Confidentiality
  • Shareholder Deadlock
  • Procedure on Winding Up
  • Transfer of Shares
  • Entire Agreement
  • Assignments
  • Waiver of Rights, Compromises
  • No Partnership
  • Costs
  • Good Faith
  • Third-Party Rights
  • Notices
  • Governing Law and Jurisdiction

All companies with shareholders should have a Shareholders Agreement in place. Not only will you find the Shareholders Agreement on the pages of our web site you can also get advice along with a guidebook to help you complete the agreement.

Our website is dedicated to making sure that the templates within our web pages are easy to use and up to date. The prices are reasonable and you will be able to download the templates onto your computer so that they can be used as often as necessary. The template provides a strong working relationship between your company and the shareholders. Browse through our web site and sign up for a subscription to save even more money and have access to all of the business start-up templates.