Whether you are thinking about setting up your own business or are currently the owner of a business, you need to rely on legal help in order to comply with the tax and regulatory requirements in your field. If you already are a business owner then, undoubtedly, you are an expert in your industry. You still need legal assistance, however, when taking care of the legal obligations that concern your professional practice or company. Partnering with a legal firm is a necessity.
Why a Shareholder’s Agreement is Important
For example, while you don’t need to establish a shareholder’s agreement legally, it still is a good idea to draw one up. Having this type of agreement lessens the risk of a potential disagreement and can make it simpler to resolve any kind of disagreements that do occur. Also, establishing this kind of documentation helps you to sift your way through some important issues. This type of contract can be particularly important when shareholders each have different objectives.
Don’t Go It Alone
For instance, if some shareholders work for your company while others invest passively, you need to determine just how to pay the shareholders who are active. Also, what may occur if you cannot agree on a certain business strategy? What will happen to the shares of a shareholder who resigns from the company or dies? These kinds of questions make it imperative to contract the services of a commercial solicitor in London. You simply cannot afford to go it alone when you have legal enquiries.
If you are a director of a company, you must comply with the company’s rules as set forth in the articles of association and company law. The articles are designed to outline what powers and responsibilities are held by the directors and how decisions should be taken.
Your obligations, as a director, under company mandates, include treating the shareholders equitably whilst ensuring the ultimate success of your business. If you are a shareholder who has put your signature on a shareholder’s agreement, then you are bound by that agreement as well.
Following the Rules Amicably
Needless to say, some issues can arise if these types of obligations conflict. If this comes to pass then, typically, the articles of association and company law usually supersede the rules in the shareholder’s contract. Nevertheless, you still need the advice of a solicitor if this type of situation exists.
This is only a small example of why you need a solicitor’s advice when you are conducting business. Just think of the questions that may arise during the course of operations. For example, can you adequately protect yourself against any cash flow issues when your business sells services or products to high-risk customers?
Also, will any new shareholder or partner be bound by a shareholder’s agreement established before they joined your company? How about outside investors? How are they affected by your shareholder’s agreement?
All the above questions need to be answered by a legal specialist who is well-versed in business and commercial law. While you may be an expert in your field, you also need to count on the expertise of others. If you don’t have legal assistance in place, it can make running a business a more difficult pursuit.