Use your time wisely: put in place a Shareholders Agreement

The outbreak of COVID-19 has forced many business owners to ‘press pause’ on their business whilst the NHS fights the pandemic. However, when you are a business owner ‘pressing pause’ is not really an option. Therefore, in this time of uncertainty, what can you do to drive your business forwards? We are all guilty of having a ‘to do’ list that we never get to and save for a rainy day. Despite the spring weather, now is a good time to reflect on your business so that when the lockdown starts to lift, you are in a better position to commence trading once more. One classic example is putting in place a Shareholders Agreement. This is a private contract that regulates the relationship between shareholders and can deal with many aspects of business including:

• How key decisions are made
• How a deadlock is dealt with
• Restrictions on transferring shares
• What happens in the event of death or incapacity
• Employee Shareholders and what happens if they resign
• Managing a majority/minority shareholder relationship
• Dividend policies
• Confidentiality
• Competition and Restrictive Covenants
• Valuation procedures and policies

Ultimately, by putting in place a Shareholders Agreement you can prevent a dispute and address many of the uncertainties that can come up in the course of business.

If you would like assistance with putting in place a Shareholders Agreement or would like an existing agreement to be reviewed, please contact Holly Threlfall and the Business Services team on 01604 828282 / 01908 660966 or email holly.threlfall@franklins-sols.co.uk.