If you are running a limited company, or if you intend to establish one, you should consider drawing up a shareholders agreement.

The purpose of such an agreement is to document what shareholders have agreed should be the practices in the business, who should do what and who should be entitled to what.

For example, the document could include reference to voting rights, per-emption rights on share transfers, or specific responsibilities for individuals. For those working within the business, what hours each is expected to put in, what holiday entitlements each should have, or indeed, anything which shareholders wish to see agreed and recorded.

The great advantage of have a shareholders agreement is that it can predetermine what otherwise might become contentious issues. It puts in writing what was originally agreed, rather than allowing individuals to recall what they thought was "understood".

For further information please contact Mark Hammond.