Shareholder agreements are vital – Chauvel & Glatt shares how can they be made easier?
Shareholders expect to have an agreement in place; having legal expertise on-side when drafting agreements can avoid headaches down the line
San Mateo, CA (PRUnderground) November 23rd, 2022
When it comes to running any modern business, shareholding is essential. Shareholding can convince investors to go into the company. It can also be an important way to help build a stronger, more gratifying business. When you face the pressure of a shareholding group, there is a greater requirement to get things done. However, one problem with running a shareholding business is the development of sound and legally secure shareholder agreements.
For anyone who has struggled with drafting shareholder agreements, the problems can be numerous. You can face shareholders who do not like the setup outlined and want more power/concessions. You might find that shareholders wish to have even more command over what happens as they own shares in the company. In short, there are precious few ways to set up shareholder agreements that will make everyone happy.
The secret? To try and focus on legally sound, all-purpose agreements. As you might have found to your cost, though, it can be increasingly challenging to set up a shareholder agreement that feels genuine. For that reason, you might wish to focus on ensuring your arrangements are watertight. Not every shareholder will like what is being proposed, but as long as it is genuine and legal, there can be few genuine complaints.
Drafting shareholder agreements is a time-consuming process. It needs a lot of input from people with experience, and it requires plenty of patience. As each edition is drafted and reviewed, you might want to ask yourself one thing: do you need legal support?
Making shareholder agreements easier to understand can increase shareholder uptake
The main solution for drafting shareholder agreements that are enforceable and legal is to hire an expert. For example, legal experts such as Chauvel & Glatt provide assistance with various forms of business law. This includes intellectual property law, managing mergers, and acquisitions, and ensuring that more can be done to help people protect what is theirs.
Shareholding agreements need to have as many people onside as possible to make them work. In the face of a new company being formed, it is the ideal time to put a shareholder agreement in place. Before anyone buys shares, this puts the agreement in place and thus makes it much easier to dictate the terms.
The primary focus of any shareholder agreement is making sure that it is legal. If your arrangements do not stand up in a court of law, you could find the whole process is void. By hiring a local team of specialists, though, you can find it much easier to draft this agreement
Agreements which are easily understood and legally sound are more likely to entice shareholders to get involved. The more convoluted and confusing the agreement, the less likely someone will join in. So, if your shareholding is not as strong as it could/should be, consider drafting a new agreement.
With legal expertise on hand, you can ensure that your agreement is watertight before anyone begins signing up.
Source: IV Media