On those grounds, it may involve problems to use templates for shareholders agreements

To the best of our experience, a tailored, exhaustive shareholders’ agreement is not a standard job to be managed by templates. Admittedly, some subjects tend to recur in all agreements, but the contents of each clause must be adapted to the specific conditions in the company and the relations between the owners. With standard templates, you risk overseeing a decisive subject for precisely your company because it is not included in the template, or you may touch too superficially on an area so that in the end, the agreement is not sufficiently exhaustive and therefore useless in a conflict. Unfortunately, at HjulmandKaptain, we often see clients turning to us with agreements which are incomplete with unclarified material matters and agreements which are actually obsolete because they have not been continuously updated e.g. every 3 year in order to match the company’s development. Besides, it is far less costly and more secure for everybody if the agreement is correct from the beginning as conflicts between owners are expensive and strenuous for both the company and the relations.

Ask our experienced lawyers to help drafting your shareholders’ agree-ment

Has your company more than one owner? In that case, you ought to make a legal agreement about how to run, operate and share your company.

The legislation on the area is not fully sufficient; and without a legal agreement, disagreements may occur in the future, and these may at worst have serious consequences for the company, its finances and the owners. The solution is a shareholders’ agreement or an adjustment of the articles of association “in times of peace” when you and your co-owners can agree on the framework for the ownership.

It may e.g. regard the resolution-making process, liability and obligations, distribution of profit, provisions in case of death or illness, any duty of confidentiality or non-competition clauses, and issues regarding the sharing of the company if you or another owner wishes to sell or if a new owner is admitted.

When the shareholders’ agreement or the adjustment of the articles of association has been secured, it may both prevent and de-escalate subsequent conflicts because it constitutes a common fixed place for you and the other owners.

You will be in a stronger position with a shareholders’ agreement from HjulmandKaptain

The advantage of letting us help you draft a shareholders’ agreement is that as specialists in this area, we advise daily on the drafting of shareholders’ agreements and adjustment of articles of association.

This means that we know the subjects to be secured at any time at the same time as we have an eye for any unique issue that needs clarification for precisely your company.

Even if you may very well be able to draft your own agreement based on a standard template, it is difficult and time-consuming to ensure that the agreement is sufficiently exhaustive and legally valid if you have neither experience in the area nor knowledge of legal matters.

Further, it is decisive that the agreement is tailored to your company, the mutual ownership, the financial position and the requests for the future if its actual purpose is to help in a conflict – and therefore, a template is often false security.

To the best of our experience, a tailored, exhaustive shareholders’ agreement is not a standard job to be managed by templates. Admittedly, some subjects tend to recur in all agreements, but the contents of each clause must be adapted to the specific conditions in the company and the relations between the owners.

With standard templates, you risk overseeing a decisive subject for precisely your company because it is not included in the template, or you may touch too superficially on an area so that in the end, the agreement is not sufficiently exhaustive and therefore useless in a conflict.

Unfortunately, at HjulmandKaptain, we often see clients turning to us with agreements which are incomplete with unclarified material matters and agreements which are actually obsolete because they have not been continuously updated e.g. every 3 year in order to match the company’s development.

Besides, it is far less costly and more secure for everybody if the agreement is correct from the beginning as conflicts between owners are expensive and strenuous for both the company and the relations.

There are two ways to make a legally valid agreement between two or more owners of a company: With a shareholders’ agreement or with an adjustment of the articles of association.

The right solution depends on your company, but we often recommend a shareholders’ agreement or a combination.

The disadvantage of adjusting the articles of association is that they are publicly available. As, however, agreements between owners often contain information about strategy, competitive conditions, employments, financial affairs, etc. it is rarely an ideal solution for the entire agreement to be public.

The disadvantage of a shareholders’ agreement is, however, that it only applies to the parties to the agreement. A new owner is therefore not bound by the agreement, so for some companies a combination is best.

Let HjulmandKaptain help you secure the future of you company

We are specialists in both shareholders’ agreements and adjustment of articles of association, our lawyers having long-term experience in the area, and every year, we draft many shareholders’ agreements and adjustments of articles of association for companies of any kind.

To you, this means that we know from experience what subjects to be discussed thoroughly at any time, and at the same time, we can quickly clarify the extras needing attention by precisely your company and ownership to ensure an appropriate agreement which works around all kinds of scenarios.

Therefore, you and your company will be in a stronger position if you cooperate with us. Reach out to us for a non-committal clarification of your options.

With us assisting you to draft a shareholders’ agreement or adjust your articles of association, you will clarify the following:

The share capital and the owners’ obligations to contribute additional capital, e.g. as equity or loan capital
The company management and how to appoint members for the executive board and the board of directors – what requirements to be applied in case of majority decisions and what requirements to protect minority shareholders?
The owners’ employment with the company, if any, and their remuneration
Main terms for any trading between the company and the owners
Guidelines for distribution of dividend

Pre-emption right in shares, e.g. co-sale right and co-sale duty, as well as guidelines for price determination of the shares
Non-competition clause in case of an owner’s retirement
Sanctions in case of breach of the shareholders’ agreement
Settlement of disagreements, e.g. mediation, arbitration and/or ordinary courts of law
Requirement for a deadlock clause by 50/50 ownership
Any unique conditions of importance to your company and its owners