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Shareholders Agreement: Regulation & Protection

We advise shareholders in a company to use a shareholders agreement. If you are a majority shareholder you will want to control any minority shareholders, particularly when it comes to selling your company or if they are exiting employees. If you are a minority shareholder you will want to ensure enhanced rights and more of a say in the business.


A company and its shareholders regulated only by standardised Articles of Association and common law does not provide suitable control or regulation in many circumstances including:


  • a specific joint venture (JV)

  • where shareholders are not directors and therefore will not have day to day control over the management of the company

  • where shareholders have loaned money to the company

  • where shareholders have minority interest but have paid a premium for their shares (for instance in circumstances when these shareholders are not founding shareholders)

  • where shareholders all want to be treated equally and influence certain decisions

  • where shareholders have contributed non-tangible assets, for example intellectual property or time



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