The Shareholders' Agreement is a contractually-binding document between two or more shareholders of a company. Whilst not compulsory, it is desirable to have the company's contractual arrangements recorded in a formal document that is agreed and signed by the shareholders or members of the company. Unlike the constitutional arrangements of a company, such as the Articles of Association, which are available to the public via Companies House, the Shareholders' Agreement is a private document.
A Partnership Agreement is very similar to a Shareholders' Agreement in that it is formulated to record (and have agreed) the contractual arrangements between the owners of a business. However, whereas a Shareholders’ Agreement is used for members of a publicly-listed or limited company registered on Companies House, a Partnership Agreement is used in a non-registered business between its Partners.
The liabilities of a Partnership carry with the Partners themselves, whereas a company's liabilities live and die with it as its own separate entity.
In a limited company, the Cross-Option Agreement is the preferred vehicle for Shareholder protection used in conjunction with a life assurance policy. It provides surviving shareholders with the option to buy the deceased business owner's shares of the business. This is known as a call option. Where the owner of the shares decides to sell the shares, they are given the right to do so to the other shareholders. This is called a put option.
SHARE PURCHASE AGREEMENTS
A Share Purchase Agreement (or SPA for short) is a formal agreement which sets out the terms and conditions relating to the sale and purchase of shares in a company. The SPA is usually drafted by the solicitor acting for the buyer
This is an agreement usually between two separate entities who wish to collaborate in respect of achieving mutually-targeted goals. This can be anything from a joint development scheme over land used for regeneration, to a local government initiative working alongside a community-interest group with the intention of providing improved facilities or a commercial activity in the town centre.
A supplier of goods, such as a manufacturer, will invariably be different to a distributor, which may include an online store. As such, there needs to be a written agreement in place between the supplier and distributor, which covers such issues such as cost, timescales, liability for damage etc. Often, the distribution of goods can involve a large and complex supply-chain, particularly where it involves products and logistics in a foreign territory, which then requires particular attention to be paid to ensure jurisdictional compliance, especially when operating in and out of the EU.
TERMS & CONDITIONS
Terms and Conditions is used to describe a set of prescribed rules which go to the heart of an agreement. In fact, terms and conditions are the same thing. A condition is a term, as is a warranty. Whereas a warranty only has capacity to provide a remedy such as damages where a breach of that term occurs, a condition entitles the injured party to treat the contract as ended and seek restitution.
Terms and conditions are commonplace in pretty much all commercial transactions.
What happens if my business falls into difficulty?
There are a number of options which you have to enable you to take steps to rescue or wind-up your business. Depending on the option, there will be a number of ways the business may be dissolved.
These options include:
Is it better if my business goes into administration or liquidation?