A formal agreement for business partnerships between two or more people is something we always strongly recommend. Without one, disputes may arise that entail lengthy and expensive legal action, and the default regime that the law provides may not be suitable.
An agreement documents the partners’ rights and responsibilities, such as the percentage of the business owned by each one, entitlements to profits and responsibilities for losses, and agreed processes for situations such as if a partner wants to leave or dies.
We will work with you to decide on the best type of partnership agreement and ensure that the document that we draw up covers as many eventualities as possible.
Similar principles will apply if you operate as a Limited Liability Partnership (LLP) and have an LLP agreement.
Shareholders agreements concern shareholders in a limited company. They should be detailed and comprehensive, covering factors such as how the company is to be financed, how it is to be managed, shareholders’ personal rights and obligations, and what happens if somebody wishes to leave.
We always recommend having agreements of this kind in place as early as possible. Without one, in the event of a dispute or a change of personal circumstances, shareholders have to rely on their rights under the general law, which can be quite difficult and expensive to enforce – especially in the case of minority shareholders.