It is common in businesses with more than one owner, to set up as a limited company so that each person can have shares.

Sometimes owners will have the same number of shares. Sometimes founders will bring other people into the business but maintain majority ownership themselves.

You can also have different classes of shares (ABCD), also called “alphabet shares” so that you can take different financial benefits from the company

Whatever structure and combination you choose it is highly recommended to get a shareholder or partnership contract in place to regulate the relationship between the shareholders.

Without one, you run the risk of expensive disagreements in the future and not having a good plan in place to protect the business and its owners from things that WILL happen along the way.

You might lose the shares you have in the business or find your business partner leaves and takes valuable assets with them, such as staff, customers, or suppliers.

You might find yourself having to deal with your business partner’s family or another third party, instead of working with the person who originally helped you start the business.

You might find yourself not able to sell the business when the time comes.

Reasons we hear why people don’t have a good contract in place and what we say about that

I can't afford it -
    •  Simple shareholder agreements start from £2500 plus VAT and prices depend on how many shareholders there are and how complicated you want to make it.
    • If you fall out with your business owner, you will spend on average about that sum for every month that you spend arguing. Most shareholder disputes take several months to resolve and it will cost much more if you do end up in court over it all.
    • In a nutshell, the amount you invest to build one will be money well spent.
    • The bottom line is you can’t afford not to!
        We're family - we get on just fine -
          • Many owner-managed businesses are also family run.
          • Having a family-run business can make for a huge success. Everyone understands each other and everyone has the same aim.
          • The problem is, families get bigger, other people get involved.
          • And even the happiest families fall out from time to time.
          • No-one gets married plans to get divorced but almost 1 in 2 marriages fail.
          • Think of this as a pre-nup for your business…
        I got one online -
          • We get it…£2500 seems like a big investment.
          • And we know there are cheaper alternatives out there.
          • The thing is these templates are just that, templates. They aren’t even always produced by qualified solicitors.
          • You won’t know if it’s wrong – you don’t know, what you don’t know.
          • They have been built as a one size fits all, when every business is unique and every owner has different aims and objectives.
          • We take our time to fully understand what your hopes and dreams are for the business that you have built up.
          • Our contracts are painstakingly constructed to provide a bespoke solution.
        What if I want to sell the business?
          • When we work with you to build your agreement, we will cover what your future plans for the business are
          • We will help you work out what succession plans may be appropriate
          • We can advise on the prospects of a sale
          • And help make sure you have the right clauses to achieve it
        Now I've got a problem - who can I call to help me -
          • Here Aly Young Law, we will be there to help you if things do go wrong.
          • But we much prefer to prevent the issues from arising in the first place.
          • In our experience, as well as causing huge emotional distress, shareholder and partnership disputes damage the value of a business.
          • Everyone loses out
          • Let us help you avoid the problem in the first place.
        What about my children?
          • Many people assume that their business share will go their children.
          • This isn’t always the case. It will depend on what you have agreed with your business owner.
          • If you haven’t written it down, you might find your wishes are not complied with.
          • It’s like not having a will.
          • On the other hand some business owners will be nervous about the risk of having to deal with their business partner’s family.
          • We can suggest other alternatives that can help make sure the business stays in the hands of people who know how to run it.

        Benefits of having a Shareholder Agreement in place –

        Shareholder contracts can include clauses that achieve all of the following benefits:
        • Protection for all the shareholders from being diluted, in other words preventing the value of their shares being reduced.
        • Stopping shareholders from selling their shares to other people.
        • Providing a mechanism and process for solving disputes.
        • Protecting the business and the owners from things like death, illness, and bankruptcy.

        Working with us

        Your guiding hand through uncertain times -
          • As well as making sure you have a watertight contract, we work with other specialists such as insurers to guide you on the options available for putting policies in place to create the cash needed for these life events.
          • All our contracts come with an explanatory document, which sets out in plain English what terms mean, so you can understand them going forward.
          • We also help you put together a “guidance letter”, which can include instructions on how to operate the business from a day-to-day level, in case someone is ill and the other business partners need to pick up their roles and responsibilities.

        And we will check in with you regularly as your business grows, to make sure your arrangements are still “fit for purpose”.


        Compelling testimonials



        So don’t be the ones who get in a muddle. Work with us to get your contract sorted and get peace of mind knowing that you can concentrate on building your business, with the right plan in place. It’s simple to book your free discovery call today. Just follow the link below.

        Book your free discovery call today

        Book your free discovery call today

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