Frequently Asked Questions
Do I Need a Shareholder Agreement?
Our answer to this question is always yes, regardless of your relationship with the other shareholder(s) in the company. Shareholder Agreements provide clarity in uncertain events such as new investment, employee share ownership or company sales. It also provides invaluable assistance during extenuating circumstances that that many of us avoid thinking about such as relationship breakdowns, disputes, shareholder incapacitation, or death. A Shareholder Agreement is a clear and unambiguous document that aims to provide clarity as to the expectations, rights and responsibilities of the shareholders.
How Does a Shareholder Agreement Service Work?
We tailor our shareholder agreement to suit your company’s needs based on the information you provide to us. Our fee for a Shareholder Agreement is €600+VAT which includes our standard clauses. A more tailored Shareholder Agreement can be created with additional clauses or changes to our standard Shareholder Agreement, which may incur higher fees which are agreed with you in advance.
How Much Does A Shareholder Agreement Cost?
Our fee is €600+VAT for our Shareholder Agreement including our standard clauses. Should you wish to make substantial amendments to our standard or add additional clauses, further fees will be incurred which will be agreed in advance. Our fees are more cost effective than going to a law firm as we do not provide legal advice alongside the agreement. Law firms in Ireland charge thousands of Euro for lengthy Shareholder Agreements that may not suit your company or your budget. Many websites online offer Shareholder Agreement templates which may not refer to the relevant sections of Irish law that is required to and may not include specific clauses that you need. Shareholderagreements.ie bridges the gap between inflated Shareholder Agreement prices and free impractical templates.
How Do I Start Drafting a Shareholder Agreement?
Think about what exactly you want from this agreement and discuss this with the other parties to the agreement. Identifying the rationale and the spirit of the agreement will help us design your bespoke Shareholder Agreement. The next step is to complete our order form, make payment and we will contact you within a working day to get started on the construction of your Shareholder Agreement.
How Is a Shareholder Agreement Drafted?
Our company secretarial professionals will review the answers you provide on our order form and will assess if you need anything in addition to the standard clauses. See the list of standard clauses below.
What are the Standard Clauses Included in the Shareholder Agreement Fee €600+VAT?
We included the following 15 clauses/sections in our standard Shareholder Agreement:
- Constitution of the company
- Undertakings & Warranties
- Management of the Company and Board
- Pre-emption rights on issue of shares
- Pre-emptions rights on transfer of shares
- Death of a shareholder
- 1Events of default
- Fair Value
- Drag Along Rights
- Restrictive Covenants
Do I Need a Shareholder Agreement if I Have an Up-To-Date Company Constitution?
Shareholder Agreements provide tighter and more personal protections to sharehoders. The Constitution is normally quite general in nature; however, the Shareholder Agreement is tailored to the Company and the specific needs of the shareholders. While the Shareholder Agreement and Constitution should not clash, questions may arise with regard to which document is more supreme over the other. Our Shareholder Agreement will prevail where a question of supremacy arises against the Constitution. Furthermore, Shareholder Agreements are private agreements, which unlike the Constitution, are not publicly accessible, resulting in enhanced Shareholder discretion.
What are the Additional or Optional Clauses that can be added to a Shareholder Agreement?
eIt is possible to add optional clauses should you wish to restrict certain activities from taking place, such as for example, no employees can be dismissed without the consent of a certain shareholder. You could add in provisions for debt and equity capital, non-financial equity, share vesting, good and bad leavers clauses, control over the board of directors, etc. Please visit our blog post for 10 Additional Clauses to Include in a Shareholder Agreement.
Can I Send Extra Clauses to be Added Into the Shareholder Agreement?
Yes, you can, and we will insert them into our template with the correct formatting for a fee. However, it will be your responsibility to ensure the new clauses do not clash with the rest of the document.
What is the Difference Between Drag Along and Tag Along Rights?
Commonly mistaken for the same thing, ‘drag along rights’ allow a majority shareholder of a company to force the remaining minority shareholders sell their shares for the same price, terms and conditions that the majority shareholder has been offered by the buyer. Essentially, the minority shareholder is dragged along into the sale. Conversely, ‘tag along rights’ gives the minority shareholder the option to sell their shares for the same price, terms and conditions as the majority, but unlike drag along rights, they are not obliged to. It is in this case they tag along with the sale of the company.