Is Your Growing Business Protected?




Growth Service

Jane Peters from 19 Legal on putting the right legal processes in place to make sure your business is protected.

Having the right processes in place to protect your business and allow you the freedom and peace of mind to manage its future success can be crucial.
Incorporating a company is relatively quick, cheap and easy to do, but putting agreements in place with your fellow business partners can seem expensive and time consuming. Is it something that needs to be done early on in the lifecycle of a business or can it be put off until later?

A shareholders agreement is a contract entered into between a company and some or all of its shareholders. It can deal with all aspects of the relationship between the parties, including the personal rights and obligations of the shareholders.

The main reason to put a shareholders agreement in place early on in the lifecycle of a company is that it is generally much quicker, cheaper and easier to do so than trying to negotiate a settlement in the event that a dispute arises and no agreement is in place to determine how such a dispute will be resolved.

Founders of new companies with real growth potential all too often “park” the issue of the shareholders agreement fully intending to deal with it at a later date when they have more time and money. The problem with taking this approach is that founders often find they actually have less time to deal with matters such as shareholders agreements as their business grows and/or the shareholders agreement gets forgotten about as they devote their time and attention to making the business a success. Additionally, personal plans and expectations may diverge over time, making it harder to agree the terms of the shareholders agreement later on in the lifecycle of the company.

With a shareholders agreement in place it is possible to prevent potential future disagreements that could occur in relation to the objectives or the running of the business. In the long term this can save hugely on costs. If conflict arises and there is no agreement in place, this can lead to expensive legal battles being lodged between the business owners. With the right terms and conditions in place, legal disputes are avoidable saving both time, money and worry.

With so much to be included in a shareholders agreement it is advisable to enlist the services of a legal advisor to make sure your business is adequately protected.

Jane Peters is founder of Nineteen Legal, a firm offering specialist advice to entrepreneurs and businesses of all sizes.

If you would like to find out more about the legal aspects of starting and running your own business the Business Growth Hub can put you in touch with a range of legal partners. Contact us on or call us on 0161 359 3050

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