SHAREHOLDERS AGREEMENTS & ARTICLES OF ASSOCIATION
Set out your ownership and operations regulations
It is important for Companies to have in place Articles of Association and Shareholders Agreements from when they initially incorporate. These documents will help to specify how the company is run and how future issues should be resolved.
The Articles of Association is a document which will set out the regulations for the company's operations. It will include details such as the share classes in issue and their associated rights, as well as include details of the process for appointing directors and the handling of financial records. The Articles of Association for the company will need to be registered with Companies House and are available for public viewing.
A Shareholders Agreement is a private agreement (it is not a legal requirement for a company and so does not need to be registered with Companies House) and will contain the specific rules for the running and ownership of the company. Typically it could include the ownership of shares as well as each shareholder/directors level of authority for making company decisions. The Agreement can be flexible for your company's needs.
Both the Articles of Association and Shareholders Agreement should be prepared at the incorporation of the company. Both of these can be amended as circumstances change, for example where a majority shareholder looks to exit the company or when the company is taking on investment.