They are also very useful in protecting the rights of minority shareholders who would otherwise be at the mercy of the majority. You also ask yourself questions that you know like — how do you think the shares of someone who wants to sell, and if there is a shareholder dispute, and what happens when someone offers to buy the company? Before entering any of these documents, you should think carefully about how your business should be managed and whether you have specific requirements. For example, did you start the business with a friend or family member? How did you pay for it? Are you the only director? These issues seem less important than raising money, but you need to take them into account when developing your company`s articles and in shareholder or investor agreements. By making sure your company`s documents are created correctly from the start, you can then avoid complications and additional expenses. It is important to remember that these documents may not be easily changed after they are entered. Creating a business allows you to build something clean, take risks and control the decision-making process. Any company with two or more shareholders should consider the benefits of a shareholder pact as soon as possible, when it is created or as soon as possible thereafter. Our team of qualified corporate secretaries designs comprehensive shareholder agreements tailored to the needs of our clients. Our fees are often much more competitive than a lawyer, with projects starting at USD 250 – VAT and limited to 500 USD – VAT (please note that the design fee is capped when additional structural changes are required for the company, but these are paid for).) Shareholder and investor agreements regulate both shareholder relations and similar provisions. The main difference is that investor agreements are generally used when “new funds” are invested lower in the business.
These investors may be unknown to the company`s current shareholders and may wish to move further away from the overall management of the company. As a result, these agreements tend to include broader provisions that investors need to give them more protection and security. Examples of provisions are included in an investor agreement: The subjects generally covered by a shareholder contract are: Often, a limited company can hold only 2 shareholders with stakes of 50:50. A shareholder pact will look at what will happen if the relationship breaks down (“Deadlock”). Both the by-laws and a shareholder agreement outline decisions regarding the management of your business. Avoid conflicts by ensuring that these documents are consistent. They must be assured that the provisions of the shareholder contract complement the articles which, in turn, must comply with the mandatory parts of the law.