You may be wondering - what is a shareholders’ agreement and why do I need one? When you incorporate a company, the standard model articles of association do not include any protective provisions for shareholders. Therefore, you will need a separate shareholders’ agreement if you want to provide further detail to govern the relationship between shareholders and the company.

When starting a business it can be tempting not to worry about shareholders’ agreements, especially if the company is very small at the outset. However, even if there are only two shareholders/co-founders involved at the outset, it is still important to get this agreement in place early on. As time goes by, circumstances may change that affect the position of shareholders within the company and unexpected tensions could arise. Writing up a shareholders agreement from the start will ensure everyone’s interests are suitably protected.

Below is a more detailed explanation of what a shareholders’ agreement is and why you need one.

How do you know the difference between an employee and an independent contractor?

Many businesses have a mixture of employees and contractors working for them, especially if the business is in a growth stage. But knowing how to classify your workforce is vital to remain legally compliant. Misidentifying employees as independent contractors can have costly legal implications for your business.

Working from home has become steadily more popular over recent years with the digital age making it increasingly achievable. Many companies already have home-working policies in place to help facilitate this. But the sudden and complete shift to homeworking for most of the country in the first half of 2020 has left many employers and employees in unchartered waters.

Now, as companies weigh up the benefits of a long term home-working structure, employees may be wondering how this might affect their employment rights. This article does not seek to be legal advice, but addresses a few of the common questions surrounding home-working employment rights.

Any company director will be familiar with the terms Memorandum and Articles of Association. These founding documents form the basis for the legal incorporation of a new company, outlining how the business is managed and run. Both are required by company law and must be agreed and approved by the founding members of the company – either shareholders or guarantors.

The constitution of a company is governed by its Articles of Association, along with any Shareholders’ or Investment Agreement. These documents also define the rights and responsibilities of all shareholders, to protect the interests of all parties concerned (including the company). Drag along and tag along rights are common clauses found in Shareholders’ Agreements and/or Articles, along with provisions relating to the compulsory transfer of shares and pre-emption rights.

Drag along and tag along rights protect majority and minority shareholders respectively in the event of a sale of the company, to ensure that all shareholders get a fair deal for their shares.