The shareholder’s agreement should ideally be drafted with legal advice to prevent any risk of prejudice to any party.
The agreement obviously need to reflect the intentions of all shareholders, who should have input into it and discuss its contents before approving and executing the document. The shareholder’s agreement should ideally be held within the company records but will be a private document that is not required to be filed at Companies House.
Most importantly a Shareholder’s Agreement:
- Should be executed before the company commences trading;
- Should be signed by all shareholders;
- Should be registered at Companies House;
You can in essence put whatsoever you want into the Shareholder’s Agreement.
However, it must not conflict with any legal requirement and may be invalid in the event of any misrepresentation to a signatory, any fraud in respect of the agreement or any mistake as to the intended purpose.
It is always recommended that, to make it watertight, you should as a minimum seek legal advice on the contents of a Shareholder’s Agreement and, preferably, ask a solicitor to draft the agreement on behalf of all shareholders.
Once signed it is can only be amended with all parties’ consent and otherwise is irrevocable and binds all parties.
