Grow your business using a shareholder agreement
If your company has several shareholders, a shareholder agreement is an efficient way to make clear agreements and keep your business growing.
Here's what you need to know:
- Why every company with shareholders needs this document
- This is how a shareholder agreement encourages sustainable growth
- Grow with confidence: how a shareholder agreement strengthens your business
- How a shareholder agreement helps to grow your business with confidence
Lay down the rules
As the word suggests, a shareholders' agreement is a contract that sets out the ground rules between shareholders. The document defines the rights and obligations of each shareholder and what exactly needs to happen in certain circumstances. It often arranges such matters as:
- Management: How frequently do shareholders receive information on the company's performance? When are the profits distributed?
- Shares: How are shares transferred? How is the value determined when they are sold?
- Decision-making: What decisions do shareholders have a say in? What majorities are required?
- Confidentiality: What information can be shared – and most importantly, what information can't?
You can fully customise the content of the agreement. By clearly defining the rules – and anticipating possible scenarios – you create trust, transparency and stability within your company.
Difference with articles of association
A shareholders' agreement bears similarities to a company's articles of association, as both documents set out agreements between parties. They should therefore be well aligned. However, there are some important differences.
The articles of association are the company's official foundation and are available to the public. A shareholders' agreement, however, remains strictly confidential. The document is therefore perfect for arrangements you prefer to keep private. In addition, a shareholders' agreement is more flexible and easier to amend, as any amendments can be made without the involvement of a notary, as is required when you want to change a company's articles of association.
Always seek legal advice when drawing up a shareholders' agreement. This ensures that the arrangements are complementary to the articles of association and each arrangement is included in the right document.
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