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What is your position around Shareholder Agreement

Do you insist everyone has one.

Didn't find your answer?

I am just wondering what others do regarding shareholders agreements.

Where unrealted Directors get togther I always encourage they get a shareholder agreement in place, however very few do as they either think nothing will go wrong or they can never agree the terms so it just gets parked and only rears its head when something goes wrong.

What do you do with couples do you also advise them to make a shareholder agreement?

When anyone agrees its a good idea do you send them in the direction of a lawyer and let them get on with it or do you push and get involved until it is in place?

Do you see it as an extra fee earner where everyone has one and you work in partnership with a lawyer to get them in place.



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By paul.benny
13th Jun 2019 12:18

They're the corporate equivalent of a pre-nup. As such they only time they really matter are if there is significant money at stake - either the amounts being invested (by any party) or the potential value of shareholdings when one of the holders exits.

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Replying to paul.benny:
By Glenn Martin
13th Jun 2019 12:58

When you form a £100 share company, that is when the agreement would need to be made, at that stage you do not know what the future value will be or who the value will be attributable to.

At the start when everyone is friends its hard to get people to spend the money, which is great until it goes wrong

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By johnt27
13th Jun 2019 12:34

General advice is to get one sorted and review regularly irrespective of the set up.

As you say Glenn most people ignore the advice and it's very difficult to say I told you so when it all goes belly up. You often see the same on LLP's and sometimes even partnerships...

Tends to be a recurring agenda/discussion point, along with wills, financial protection, IP etc.

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Replying to johnt27:
By Glenn Martin
13th Jun 2019 13:04

I had a company setup with 4 friends, and I encouraged them to set it up, but they could not agree terms and it has dragged on and ended up not getting in place.

They now have an issue with 1 not pulling his weight.

My worry is once the individuals start taking independent advice, you are exposed to losing the job if you are perceived to be taking side with people.

Its dead easy with the benefit of hindsight for someone to say "well your accountant should put a shareholder agreement in place and you wouldn't have this problem."

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Replying to Glennzy:
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By Matrix
13th Jun 2019 14:34

I don’t understand your last sentence. I recommend shareholder agreements and each party engaging their own lawyers, but clients rarely listen and often part ways acrimoniously. However it is entirely their decision to scrimp on legal fees and nothing to do with me.

I don’t see how you make fees from this, are you covered for legal work?

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Replying to Glennzy:
By JoF
13th Jun 2019 18:02


I had a company setup with 4 friends, and I encouraged them to set it up, but they could not agree terms and it has dragged on and ended up not getting in place.

The writing was on the wall at company set up if they couldnt even agree at that stage. You can lead a horse to water......

Ive never heard anyone bad mouth an Accountant for not putting an agreement in place, but I think it would be a valid comment if the accountant hadnt suggested it.

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By In a Daze
14th Jun 2019 00:05

I advise clients to seek a solicitor and draw up a shareholders agreement. It is up to them if they take my advice.

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By North East Accountant
19th Jun 2019 08:53

When setting the company/LLP/Partnership up we advise all clients to get a shareholders agreement/etc.

Most don't bother and have no interest in getting this sorted.

Include a paragraph in your letter sending setup fee strongly advising them to do it. Move on.

If (when) it hits the fan don't say I told you so, although a polite reminder of your letter dated X advising them to do so should be suffice.

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