There may come a point at which either one of the business owners or shareholders wishes to leave the company for what ever reason. This may sound fairly straightforward, but without a proper agreement in place a multitude of problems can arise.
For example, the shares may now be worth a lot more than they were in the beginning, but the other shareholders can’t afford to buy them. What if that shareholder sells the shares to someone you don’t want to have in your business? You could be left open to a takeover as a result of a shareholder exiting.
Then there is the possibility that the shareholder that wishes to leave, wants to set up in direct competition. Your shareholder agreement should protect you against this scenario.
Also if there is an issue with a shareholder and they need to be removed from the company, it can be very difficult. Without a proper agreement in place, you could find yourself going through a costly and lengthy court case and still be on the losing side.
When starting out in business it is usually done with like-minded individuals who share your vision and with whom you have a good deal of trust.
However, as a business grows and circumstances change, so can the ‘ideal’ of the partners. These differences may lead to disputes if there is no clarity about what happens should certain situations arise. This can ultimately lead to the downfall of the business.
Disputes surrounding misappropriation of funds, allegations of misuse of the company bank account or setting up a competing business are just a few of the issues that can arise as a company grows.
A well drafted, bespoke shareholder agreement can help you to avoid these kind of catastrophic disputes that can lead to a great deal of time, energy and finances being used to resolve the avoidable issue.
To avoid the headache why not contact us today and speak to one of our experts in Shareholder Agreements.
Whatever your business and whether you are a landlord or tenant, we can help you enter into a robust lease on fair and favourable terms – we have dealt with commercial leases of all kinds of properties, from corner shops to shopping centres. Our years of experience enable us to highlight important issues in the lease and any supplemental lease documentation. We will work with you to find solutions and will expertly negotiate matters on your behalf.