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'What if?' NOT 'what now?' - Why prevention is better than the cure

We, as a firm, are often asked how to resolve an existing dispute between business owners, where there is no documentation in place to govern their relationship, and the honest answer is to jump in the DeLorean and hit 88 miles per hour (kids, ask your parents. Parents, you should get the reference).

What’s in a number? Why different shareholder percentages mean different rights.

In this article, we will explore some of the rights, risks and obligations that differing percentages carry in a private limited company. References to a percentage are to the percentage of ordinary voting shares and assumes they all rank equally in that regard, i.e. no class of shares carries any additional, or weighted, voting rights.

Breaking up is hard to do. What to do when a shareholder leaves

Inevitably, the directors and shareholders of a company will be privy to a great deal of commercially sensitive information; customer lists, business opportunities, routes to market, pricing strategies, and there seems to be a general perception that this information is safe...Well, yes and no.

Tug of War – When your 50/50 Joint Venture can’t agree

What happens if the company in which you are involved is a 50/50 joint venture? By this I mean that there are two people involved, both of whom hold 50% of the issued share capital, and both of whom are directors.

Playing fair – What happens when share percentages change?

The two most common ways in which a person can become a shareholder are by the transfer of existing shares, or the issue of fresh shares.

Reservation for Two. Making sure everyone gets a seat at the table

Whilst there are remedies for a minority shareholder whose position is unfairly prejudiced by the majority shareholder(s), these can be very expensive and complex, and fall outside of the scope of these articles. Besides, prevention is always better than a cure.

Kicking and Screaming...what happens to the little guys when its time to sell a business?

Imagine you are a majority shareholder, holding 85% in the capital of your company. The dream has come true, and a larger company has offered to buy your business for £10m. The fly in the ointment is that the minority shareholder, holding 15%, does not want to sell. The business is presently providing him with a steady income, and his £1.5m share is just not enough to make him interested – some people!

Pre-emption - It's not what you know...

A key aspect of any organisation is knowing exactly who you are in business with. Whilst certain aspects of the model articles and other governing law restrict (although do not necessarily prevent) a company from issuing fresh shares without at least offering them to the other shareholders, there is nothing within the model articles or at law to prevent a shareholder from selling, or even gifting, existing shares to any person.

'And...Action!' Company Directors and Shareholders - who takes the starring role?

A common question often asked is ‘what is the difference between a director and a shareholder?’ The basic distinction is that the shareholders own a company (holders of a share of the company) and directors run the company (they direct the conduct).

Articles of Association - Why it pays to play by the rules

You’ll notice a common theme in this series; I’ll be mentioning ‘articles of association’ and ‘shareholder agreements. A lot. And for good reason. But what are they?