Unless you are the sole shareholder of a company, you should always consider entering into an appropriate Articles of Association shareholders agreement.
A shareholders agreement is a document outlining the legal agreements made between the shareholders of a company, regarding their rights and obligations as shareholders. This agreement is a private contract and can be kept confidential. This differs from the company’s Articles of Association, which are made public.
Articles of Association
The Articles of Association will only go so far in protecting the shareholder/director(s) of a company. It is necessary to draw up both. The shareholders agreement also provides more flexibility regarding how shareholders regulate their business relationships; more so than the Articles of Association can do on its own.
Platinum One Accountants would work with you to identify relevant elements to suit you and your business.
However, you may consider the following provisions:
Share transfer provisions/restrictions.
Information rights for the shareholders – to see minutes of the shareholders meetings/the right to vote on decisions.
Resolving shareholder disagreements/issues.
Equity investments and the financing the business.
Protect the Interests
Provisions to protect the interests of the company – so that a shareholder cannot open a competing business.
Exit provisions: how shareholders will release their investment.
How critical decisions are made that require special consent.
Dividends & Salary
Dividends and Salary – setting out clear rules regarding the payment of dividends, directors’ fees, salaries and other benefits.
The appointment and removal of company directors.