Shareholders agreements regulate the rights between shareholders in a company. Where the operating vehicle is a trust, then a unit holders agreement is the equivalent document (i.e. it regulates rights between unit holders, rather than shareholders). It is important that the resolution of disputes is satisfactorily covered in a shareholders agreement as litigation is both costly and time consuming. A well drafted shareholders agreement can minimise the cost and time involved in resolving disputes which arise between shareholders. Control issues, insurance (for directors and key personnel), as well as a means of funding the purchase of an exiting share holder, are issues commonly addressed in shareholders agreements. No two companies are the same and accordingly each shareholders agreement is tailored to meet the needs of the particular company. Most of the issues covered in a shareholders agreement are not referred to in the company's constitution.
In most cases shareholders agreements are complex documents which we at Peacockes are able to draft, along with input from the client's accountant.