Shareholder agreements protect your business from damaging disputes and preserve the value of your business investment. Setting up and running a new business is the perfect opportunity to invest in a professionally drafted shareholders’ agreement before starting any joint project, no matter how casual the relationship. This way you, your business and your shareholders will be protected as your business grows.

Why are shareholder agreements important?

Shareholder agreements are important to cover all the issues that are not covered by the Memorandum of Incorporation of the company, or company legislation itself. In the absence of any written shareholder agreements, your company’s shareholders are typically treated equally and share dealings are governed by legal rules that may not necessarily take into account the aims of the founders of the business.

What are the advantages of shareholder agreements?

Some of the benefits of having a shareholders’ agreement in place include the following:

• Keep your business dealings private
• Safeguard your business against disputes
• Protect the interests of your shareholders
• Improve your ability to attract future investment
• Ensuring everyone is on the same page as to how the business should be run