Shareholder/director advice

We find that many people set up their business as a limited company with understanding the legal implications. We can advise on the consequences of doing so. for example, although limited liability means that a shareholder cannot be made liable for the debts of the Company, there are many situations in which a director can incur personal liability. e.g. by signing personal guarantees to the bank or when acquiring vehicles or machinery under Leasing or hire purchase arrangements.

It is also important to understand the balance of power between the Board of Directors and the shareholders and the implications of being a majority shareholder or a minority shareholder or what it means to be an equal 50/50 owner.

Contact us if you need some general advice or advice in any of the following areas:

  • Advising on personal guarantees – If you have been asked to give a personal guarantee to the bank in support of a loan to the business and/or if your spouse would like you give a charge over your home, please contact us so that we can advise on the implications.
  • Director’s Service Agreements – We can draft these or advise on their interpretation.
  • Liabilities of Directors – Directors can find themselves liable to creditors (particularly when the company is insolvent) and/or to the Company e.g. if there is a conflict of interest. Contact us if you need advice.
  • Sale/purchase of shares – We are often involved with the purchase or sale of shares between shareholders as part of an agreement involving the resolution of a dispute.
  • Shareholder Agreements – A Shareholder agreement can deal with a number of “what-if” scenarios arising in the joint ownership of a business. We can help to protect the interests of the majority and the minority shareholders.
  • Shareholder/Director advice – Many directors/shareholders are uncertain about the responsibilities of their roles. Please contact us if you need advice.
  • Shareholder disputes – We are very familiar with the arguments that arise when shareholders fall out and specialise in resolving these disputes.

Examples of recent work:

  • Drafting shareholders agreement and subsequent amendments in respect of healthcare organisation with multiple shareholders;
  • Drafting shareholder agreement for professional services firm with four unequal partners;
  • Initial advice to shareholder on his shareholder rights in the absence of a shareholders agreement in a science company;
  • Advice to shareholders on setting up new business between investor and shareholder/employee in respect of new restaurant business;
  • Advice to two prospective shareholders on how best to protect their relationship with each other using a shareholder agreement;
  • Drafting shareholder agreement between two equal shareholders in Furniture manufacturing and distribution company;
  • Drafting shareholder agreements between five unequal partners in IT company.

See also

Shareholder disputes and boardroom deadlock

Keeping your monthly dividend