The purpose of a Shareholders Agreement is to set out exactly what will happen in the event that you and your fellow shareholders have a serious falling out. Whilst this might be the furthest thing from your mind at the present time it is always a possibility and a well written Shareholders Agreement can save you and your company enormous grief.
Preparation of such a document can readily be done either by downloading a suitable template, for anything up to a few hundred pounds, or using an appropriate professional service for anything up to a few thousand pounds depending on the complexity of the situation. In any event, done correctly it is well worth every penny.
It may be that you feel that because the shareholder in question is your spouse, best friend, or family member such a formal arrangement as this is unnecessary. Do not let this put you off. Apart from anything else, such an agreement freely entered into by all parties is one of the best possible ways of protecting your relationship with your other shareholders whoever they may be.
You may also be thinking about the difficulties that may be encountered in asking your spouse to review a shareholders agreement – I would suggest that you approach this jointly as just another of those regular tasks that need to be done at various stages in the growth of any business.
Because a Shareholders Agreement is a legally binding document it can also help enormously should something happen to one of the shareholders – you may choose to use this as the very reason you are bringing the subject up in the first place. Without such an agreement, and the associated personal provision in place, the probate process could take very much longer leading to delays in reallocation of the shares which could severely affect the operations of the company.
It is also so often true that when negotiations are over and full agreement is finally reached, uncertainty is removed and those things that used to bug you about your partner, friend, or family member can seem to magically drift away leaving everyone to get back to focussing all their attention on the business.