When you set up a limited company, part of the process will involve creating shareholders who own the shares in your new company – find out more about shareholders here.
If you have more than one shareholder, it’s sensible to create a ‘shareholders’ agreement’ that sets out how the company will be run by your directors/shareholders.
A shareholders’ agreement helps to:
- Define the shareholders’ responsibilities and who does what in the business
- Make sure the company runs smoothly and efficiently
- Reduces any potential disagreements and conflicts between your shareholders.
Do the shareholders’ agreement have to registered?
Your shareholders’ agreement is generally not a public document – it’s an internal agreement between you and your fellow shareholders around who will be responsible for what, and may will contain information you don’t want available publicly through Companies House.
Your 'Articles of association' is similar to the shareholder’s agreement, but is a public document filed with Companies House, listing the rules that you and your shareholders have agreed on relating to the running of your limited company.
If you include any provisions in your shareholders’ agreement that change your previously filed company rules, these elements have to be added to your articles of association – and will become public information.
If you’d like some help setting up your shareholders’ agreement or company rules, give us a call on 01454 300 999, or drop an email to info@fd-works.co.uk
Find out more about the FD Works’ approach to finance at fd-works.co.uk