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A shareholders agreement should be legally binding once it has been signed, provided it complies with the typical aspects of a contract, including offer, acceptance, consideration, and an intention to create legal relations.

We have 5 steps. Step 1: Decide on the issues the agreement should cover. ... Step 2: Identify the interests of shareholders. ... Step 3: Identify shareholder value. ... Step 4: Identify who will make decisions - shareholders or directors. ... Step 5: Decide how voting power of shareholders should add up.

Our fees for preparing and drafting a shareholders' agreement start at £1,250 plus VAT. A Shareholders' Agreement helps protect the legal rights of all shareholders in a business and aims to ensure everyone is treated fairly. The Agreement sets out: The allocation of shares among the owners of a limited company.

A shareholders' agreement doesn't need to be notarized. It is a confidential contract between shareholders and must be signed by all parties.

A shareholders' agreement is no different from any other form of contract and so can become binding on shareholders because it has been agreed to by all of them either orally, in writing (but not formally signed) or by conduct.

Shareholders could leave the company to set up a competing business. Investors in the business might be put off without a clear shareholders' agreement. Shareholders might not invest equally, or put as much effort into the business but receive the same returns.

The best way to draft a shareholders' agreement is to ask a lawyer to draft this for you, as they will ask specific questions designed to help you work through different options, depending on your particular circumstances.

A shareholders' agreement includes a date; often the number of shares issued; a capitalization table that outlines shareholders and their percentage ownership; any restrictions on transferring shares; pre-emptive rights for current shareholders to purchase shares to maintain ownership percentages (for example, in the ...