Shareholders Agreement – Benefits Guaranteed!

What Benefits Are Guaranteed?

We guarantee that you can only collect benefits from a shareholders agreement.  That’s it.  But that’s not to say that those benefits do not include responsibilities.  Nothing comes from nothing but it can become nothing, if you fail to comply with the rules.  There are rules for everything in life, so don’t be intimidated by a legal document with rules.  At DG Law, we have an array of expert advice to help you understand what a shareholders agreement is, what it entails, what your responsibilities are and what benefits you’ll get from such a legal document.

Shareholders’ Responsibilities

As a shareholder of a company with your name on a shareholders agreement, some of your responsibilities will include:

  • Appoint company officers to run the business
  • Elect directors for the company’s management
  • Decide on directors responsibilities and liabilities
  • Remove officers or directors who fail to comply with rules
  • Regulate the company’s finance
  • Decisions and approvals of wages
  • Decisions on division of shares
  • Decisions on what is stipulated in the shareholders agreement

Who’s In Charge? 

Shareholders appoint directors.  Whilst Shareholders are in charge of the company, directors are in charge of running it.  Company directors are stewards accountable to shareholders and corporate statutes.  You might think that the shareholders delegate how the company should run but that’s not the case.  The shareholders appoint directors with an expertise to run a particular part of the business. 

Directors And Their Roles

Here are some examples of directors and their roles: the finance director is appointed to deal with the financial part of the business.  So the finance director will be the one responsible for all aspects of finance.  The same goes for the marketing director and the business development director as well as the sales director.  Each director will be responsible for their own department. 

Accountability

Directors are accountable to shareholders, but shareholders are not responsible for the way a director runs their department.  Nor do shareholders run those departments, because they don’t need to be experts or knowledgeable in areas of finance or sales (that’s why they need to appoint someone specialised in that field).

If you have any queries regarding your existing shareholders agreement or if you would like to have one drafted by our team, please book a call with one of our corporate lawyers. We can have an initial no commitment discussion on the phone. Please fill in the contact form below. SG

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Call us now on 020 7113 4003 or complete our Online Enquiry and we will be delighted to talk with you about your legal matter.

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