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Shareholder & Partnership Agreements
At Fishers, we know that all too often disputes can arise between business partners and shareholders. Given the risks involved with starting a business and the disputes that can occur down the line, we believe a strong business needs a strong agreement from day one. If you are looking to create an agreement with your shareholders or business partner, get in touch today with our solicitors in Ashby de la Zouch or Tamworth.
A shareholder or partnership agreement is a written agreement between either the shareholders or the partners of a business detailing specifics on funding, management, owner responsibilities, direction and structure of the business.
In order to minimise the potential for conflict and reduce the risk of uncertainty in the future, we believe that it’s vital for a business to come to an agreement on these fundamental issues as early as possible.
At Fishers, our commercial solicitors can draft and review shareholder or partnership agreements that cover all the necessary grounds so the partners or shareholders in your business can share the same expectations, make decisions in confidence, and avoid conflict.
Each business is unique, and so too is each agreement. That’s why we believe it’s paramount to listen and understand your needs and concerns before drawing up an agreement. From professional advice on business strategy to the drafting of the agreement, Fishers shareholder and business partnership agreement solicitors will ensure that your partners or shareholders have the peace of mind to proceed and succeed.
Get in touch
For further information on any of our services or to book an appointment with one of our shareholder and partnership solicitors please call your nearest office or complete our online enquiry form and a member of our team will be in touch.
What our commercial solicitors can do for you
Our commercially aware and innovative approach to shareholder and business partnership agreements allows our clients to run their businesses smoothly and professionally with confidence in the legitimacy of their decisions.
We cannot overstate the importance of investing heavily in your initial agreements when entering into business with others. Whether you are forming a limited liability company, partnership or limited liability partnership, the shareholder and partnership terms on which you base the business will ultimately define how it is run and how disputes will be resolved.
Our expertise includes:
- Drafting agreements
- Reviewing agreements
- Business strategy advice
- Cross Option Agreements
- Partnership Agreements
Why have a partnership agreement or shareholders agreement?
Whether you make an agreement or not, forming a business will automatically have consequences in law. For companies, the relevant law is contained in the Companies Act 2006 and partnerships fall under the Partnership Act 1980. Both pieces of legislation set out clear rules for the structure, conduct, duties and obligations of shareholders, partners, and anyone else involved in a business (such as directors).
However, in the UK, we are generally allowed to conduct business freely and the default laws on companies and partnerships do not necessarily apply to the realities of our individual circumstances. For example, by forming a partnership without an agreement:
- All partners are jointly for the debts of the business, including being jointly and severally liable for the wrongful acts or omissions of the other partners in the course of business
- Similarly, each partner is equally entitled to the profits of the business
- Each partner has a right to participate in the management of the business unless decided otherwise by majority agreement
- No partner can be removed unless all agree
- If one of the partners dies or become insolvent, the partnership automatically dissolves
- There are no restrictions on the actions of partners after they leave the partnership, such as constraints on whether former partners can approach customers independently
By forming a limited company without an agreement, there’s uncertainty about:
- How day-to-day decisions will be made
- What happens when shareholders leave the business
- How the shares are to be valued
- Whether other shareholders have the right to buy the shares of a departing member
- Whether shares can be sold to third parties after a member departs
By having a shareholder or partnership agreement, you can redefine the relationships between key stakeholders under a legally binding contract.
Partnership agreements and shareholder agreements can protect minority shareholders, correct many of the less beneficial aspects of forming a business, and answer outstanding questions about how the business is to be run.
What terms should be included in a shareholder or business partnership agreement?
We can provide practical advice which is tailored to your individual circumstances in line with your overall business strategy.
The following are important areas which should always be covered by your partnership or shareholder agreement:
- How the assets of the business are to be owned
- The financial obligations and entitlements of each party, such as the financial commitment required by each party
- How will decisions about the business be made? Can some decisions be made by majority rule and which require unanimous agreement?
- How to break deadlocks
- What happens to shares in the business after certain events such as critical illness or death?
- Non-compete provisions
- Other exit planning provisions, including whether partners or shareholders can sell their stake at any point and clauses governing pre-emption rights
Shareholder and partnership disputes
If you are facing a shareholder or partnership dispute, our commercial dispute resolution solicitors can provide clear, realistic advice on resolving the issues at hand. Where there is a shareholder or partnership agreement, we can offer a detailed review on its contents and interpretation as well as assist in negotiations and settlement discussions.
It is rare that disputes have to go to court with the rising popularity and success of Alternative Dispute Resolution, but if it does become necessary in your case, we will robustly represent your position, giving you the best possible chance of achieving a positive outcome.
Why choose Fishers’ commercial lawyers?
We’ve attained an enviable reputation for our skilled and modern approach to legal services. Our priority is to help your business run smoothly and avoid any unnecessary disputes. Disagreements amongst partners and shareholders can have the potential to result in lengthy and expensive court litigation. However, with an agreement drafted by one of our specialist solicitors in place, you can easily sidestep impending legal battles.
We will assist any type of business and have a wide range of experience, from tech start-ups, to property developers, to regional companies.
Our comprehensive full solution services mean our clients choose to stay with us for the long haul, trusting us to continue evolving our advice as their business goals and strategies vary and develop.
Fishers Solicitors is independently regulated by the Solicitors Regulation Authority (SRA).
Contact our shareholder and partnership agreement solicitors in Ashby de la Zouch and Tamworth today
For further information on any of the above services or to book an appointment with one of our shareholder and partnership solicitors please call your nearest office or complete our online enquiry form and a member of our team will be in touch.