Navigating Shareholders Agreements: Essential Insights

Published 23rd May 2023

A shareholder's agreement is not a legal requirement in the UK but whilst they are commonplace in Private Equity and Venture Capital transactions they are rarely seen in private companies. It is our professional opinion that whilst it may never be used the Shareholders Agreement protects each shareholder from any unwanted “What-If” scenarios and is an essential tool for business. We have seen in numerous cases where disagreements that could have been clarified through a Shareholders Agreement has led to lengthy and costly legal disputes.

The contents of the binding document may vary but traditionally will include the following common provisions:

Shareholding rights and obligations:

Decision making

A well-drafted shareholder's agreement should reflect the needs and goals of the company and its shareholders and should provide a clear and comprehensive framework for managing the company's affairs. The Pierce Corporate Finance Team can provide expert advice and knowledge if you are looking to introduce a shareholder's agreement to your business.

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