Cost of Shareholder Agreement

[waveneygnome]

Can anyone give me an idea of costs for a SA?

(We are a Ltd co, 3 shareholders, been trading for the past 21 yrs. One shareholder is retiring, the company is buying back his shares. The 2 remaining shareholders will effectively be 50/50. Our accountant has advised us to get a SA, and given us his preferred solicitor)

We have just been quoted £2000....which we thought was a bit steep.

Are there any templates that we could download?

 

[The Resolver]

Never use a template yourself!

Firstly - it will never be a 100% fit

Secondly - if you DIY, you may not fully understand each clause

Thirdly - there IS no all singing-all dancing template. There are only ideas used by others. The point is that when you go into business together you are entering into a contract, partly in writing and partly oral. This contract applies over and above the Company law rules. The purpose then of an SA is to ensure every detail you wish to agree is included. Anything can be included especially to cover a series of 'what ifs' and not just about when a shareholder is dismissed from the board or wishes to sell or dies or what is the planned exit strategy or,if none, what to do when a buyer comes knocking. You could cover some entrenched ground rules that, if overturned by majority vote, trigger compensation to those who suffer loss as a result. You could cover anything such as regulation of expense claims, company use of personal property, ownership of IPR generated by staff, contracting with directors' separate businesses, or even the colour of the office walls! By having an advisor you give yourself an opportunity that he can introduce terms that you may want to agree on but are not included in a template.

I see lots of company disputes and most could have been avoided had agreements been put in writing at the outset on as much detail as possible. Dispute avoidance is the best form of dispute resolution and clearly understood and comprehensive rules created in agreements make disputes harder to be born.

I licence and provide an SA expanded and augmented (to cover what you want covering from brainstorming the 'what-ifs') from a number of templates I have used in the past to cover your requirements, together with an explanatory layman's guide, for £750.

 

[hazeleigh]

Hello shareholders agreements can be bought on line from any legal documents website for as little as £45.They will provide you with the structure and template clauses.
The key is to focus on what happens if it goes pear shaped and valuation of the shares if one party leaves.
Fees for a robust shareholders agreement are fixed at £500+VAT
Good luck!!
Michael Coyle

 

[Jenni384]

I have seen first hand where a shareholders agreement was used from a template. The business relationship broke down. After taking legal advice, the agreement turned out to be more of a hindrance than a help, and the solicitor said it should really have been checked over as a number of clauses weren't any good.

I don't know how much it would cost to get one drawn up properly, but I think should things go bad down the line it ould be money very well spent indeed.

 

[Bill Ryan]

I must agree with the sentiments in the posts above.

Most business agreements including Shareholder Agreements regulate the stuff that you need in place after the honeymoon period is over. You need proper 'rules' in place to regulate the behaviour and relationship betweeen the shareholders.

If you are going to end up owning 50:50 you would benefit from a device in the SA to deal with deadlock as well.

I offer a fixed price Shareholder Agreements for £600 + VAT (for 2-3 shareholders as is the situation in your case)

 

[waveneygnome]

Thanks for the replies.

I did think the £2000 quote was high. I've gone right off that firm of solicitors now!

 

[The Resolver]

Thanks for the replies.

I did think the £2000 quote was high. I've gone right off that firm of solicitors now!

It wasn't high. Its just that when you instruct a firm of solicitors, you are paying not just for the time and experience of the solicitor, but a contribution to the cost of all the staff and other overheads.

This model is changing from later this year when non-law companies will begin to fully commodotise many legal products ending up with a more market sensitive price.