As with any company conducting business a key element of ensuring both success and security is harmonious thinking within the company. Of course, this can’t always be possible and this in many respects is where a Shareholder Agreement comes in. Under the Companies Act 2014 there are very little provisions outside of the basic when it comes to the powers and rules that govern Shareholders as known as Members. A Shareholder Agreement can fully explore the intricacies of all aspects that relate to share classes.

Within an agreement, there are two distinct sections which can either be rolled together as one document or split into two distinct documents, the Core or main body of the agreement and the additional Options section.

The Core

The Core is, as the name suggests, the main common elements to be found in the agreement. This section builds on the basis laid down in the Companies Act 2014 and provides greater detail on how shares are dealt with, covering many sections including:

  • Setup costs
  • Fundamental disputes
  • Transfer of Shares
  • Objectives
  • General management of the company

This Core section outlines in great detail how the day to day management of the shareholding and power within the company should be distributed. It will also safeguard against disputes and tied voting situations that could otherwise hinder the progress of a company.

The Options

The second part of a Shareholder Agreement steps completely away from what would be governed in part by the Companies Act 2014 and the Constitution of the company. The optional clauses section can cover a wide range of eventualities within a company focusing on future success and avoiding pitfalls. Just some of the pieces that can be covered here are:

  • How a company is sold
  • What happens when a shareholder wishes to leave the company
  • Who has the power to appoint Directors
  • Who is owed money on Liquidation
  • Treatment of loans to and from investors
  • New share offers
  • Succession rights

As can be seen from the above, the options section of the agreement is fully customisable to ensure that the future of a company is handled securely and in the exact way the shareholders intend from inception.

The experts at ShareholderAgreements.ie are available to assist you in any way with securing the future of your business or any matters relating to Company Law. Please feel free to contact us on 01-2405277 or email contact@shareholderagreements.ie.