Canopy Law > Shareholder Agreements > Why do I need a shareholder agreement?

Why do I need a shareholder agreement?

A shareholder agreement is a contract between business owners that sets out what will happen if something unexpected happens. It is inevitable that unexpected things WILL happen in the life of your business.

The important thing is not to prevent them happening in the first place – that is impossible – but how difficult ownership issues will be dealt with by the shareholders when they do arise. You hope that problems will be resolved in a straightforward and hassle-free manner. But every business owner is different.

A shareholder agreement is like the fence at the top of the cliff. When your business strays off course the shareholder agreement protects your business from falling onto the rocks below. It ring fences the danger and keeps you out of the hands of the lawyers waiting beside the ambulance at the bottom of the cliff.

You may be suspicious of shareholder agreements. I recall a meeting with a company owner who wasn’t in the habit of mixing his words: “I’m suspicious of Shareholder Agreements. What’s the point?”

Unfortunately, simple questions do not guarantee simple answers and this one is rather difficult. Don’t let that put you off though.

On this site you will find an explanation of who needs a Shareholder Agreement, what protection it provides a company owner and what happens if you don’t have one!

The answer might not be simple, but it should be understandable.

If you are ready to put in place a shareholder agreement contact us to get started today.

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“A good Shareholder Agreement is like a fence at the top of a cliff, which stops company owners from falling over the edge and into the hands of lawyers who wait in the ambulance parked beside the rocks below.

This book explains in easy to understand language what a Shareholder Agreement does, the common clauses it contains and when it is best to put one in place.”