What is a Shareholders Agreement?
A shareholders agreement sets out the rights and obligations of the shareholders of a company. It is separate from the company’s constitution.
Even though it is not a legal requirement to have a formal agreement in place it is our strong suggestion that if there is more than one shareholder in a company (related or unrelated to each other), you should have a shareholders agreement.
Why? Here are our 5 top reasons:
1. Protection of your interest as a shareholder.
2. Setting ground rules about the operation of the Company.
3. Certainty about the scope and extent of your rights and obligations as a shareholder.
4. One document that sets out the rights and obligations as a shareholder.
5. It will allow you to do things differently to the default position prescribed by law.
Once in place, you can hopefully set and forget. Not sure? Please contact us.
