Legal advice on share restructuring and shareholder agreements
In the absence of any commercial agreement, there is no statutory mechanism to allow business partners to “divorce” and if no agreement is put in place at the outset, shareholder-managers can find their focus shifting from the business to dealing with disputes which can be disruptive and potentially devalue the business.
If you are bringing in additional investors or are planning to enter into a joint venture with multiple shareholders, it is important to manage the expectations of the parties in a shareholders’ agreement to:
- Identify a decision making process.
- Understand the circumstances in which a shareholder can be required to return his shares.
- Define how the parties can part company in the future and how an exiting party can extract value from the business or, conversely, the remaining parties protect the value of the business.
You may wish to consider who would have the option to acquire shares if one party wished to exit, whether shareholders should have a right to transfer shares to manage their personal wealth and how those shares would be valued. If this is clearly set out at the beginning of the relationship, the impact of disputes can be minimised in the future, saving valuable management time as well as money on legal advice.
I am also able to advise on and implement the range of re-structuring measures available under the Companies Act 2006, for example, share buy-backs and redemptions, capital reductions and alteration of share capital.
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I am available to discuss your business law requirements with in person in person if geography permits or over the telephone. Legal Services for Business provides advice on company law to businesses across the South, the South East and London. My details are listed below should you wish to contact me.