#2 Podcast – TLD Talks … shareholder agreements with David Garland

Episode introduction:  

In this episode of TLD Talks, Ed Simpson, CEO of The Legal Director, and Client Legal Director David Garland discuss shareholders’ agreements. What should a well-drafted shareholders’ agreement provide for and what problems could your business encounter without one?  

Today’s guest: 

David Garland advises on all areas of business law. He is a qualified barrister with 18 years’ private commercial law experience, and more than a decade of experience as a general counsel, in-house legal director and non-executive director of AIM-listed energy and resources businesses. 

Main topics: 

1. What does a shareholders’ agreement actually do? (00’50) 
2. Do you have to have a shareholders’ agreement? (01’24) 
3. What sort of things would you normally expect to see in a well-drafted shareholders’ agreement? (02’24) 
4. Could you put all of your provisions in your articles of association instead? (04’07) 
5. Do you have to publically register a shareholders’ agreement or can they remain private? (05’54) 
6. The importance of getting professional advice when preparing a shareholders’ agreement. (06’38) 
7. Provisions dealing with deadlock and termination. (07’24) 
8. What happens in a deadlock situation if you don’t have a shareholders’ agreement? (08’28) 
9. How might a well-drafted shareholders’ agreement enable the parties to move forward in a deadlock situation? (09’13) 
10. David’s experience of shareholders falling out. (10’06) 
11. What happens if one partner loses interest in the business and stops pulling their weight or tries to set up a similar business in competition? Can the other party do anything to stop them? (11’35) 
12. Forfeiture as a provision in shareholders’ agreements. (13’30) 
13. What happens if a shareholder dies or is incapacitated, in a situation where there is no shareholders’ agreement? (14’13) 
14. Other issues that might come up in the absence of a shareholders’ agreement, for example sale of shares to a third party or a third party buying the whole of the company. (15’58) 
15. Three top tips for business owners thinking about going into business together, or who don’t have a shareholders’ agreement in place yet. Including seeking professional advice to get the most out of a shareholders’ agreement, having an open and detailed discussion about their expectations in relation to the business, and making sure the shareholders’ agreement includes a roadmap to deal with potential problems and issues. (17’45)