A Shareholder or Partnership Agreement will create the appropriate rules which have been agreed by all at a time when all parties are in harmony with each other.
Most companies will have Articles of Association but very often these will be set template forms that do not allow for the particular business that they govern. Whereas a Shareholder or Partnership Agreement is contract between the owners of the business, signed individually by them providing a framework by which future decisions can be made.
It will govern many foreseeable eventualities and also unforeseeable ones, and C S L J Wills will usually incorporate a clause to deal with such circumstances as:
the death of a shareholder
a shareholder losing mental capacity
a shareholder becoming bankrupt
a director/shareholder wishing to retire
the business wanting to issue more shares
the business wanting to raise finance or make investments
how is a disagreement between shareholders dealt with
the business is to be sold but a minority shareholder refuses to sell
how does one decide upon the value of the business
a shareholder leaving the company and then approaching the company's clients.
