Shareholders Agreements

In a limited company, each share carries a prescribed number of votes.

In most cases all the shares are of the same class (ordinary shares) and each carry one vote. That means that a majority (over 50%) controls the company. However, there are many situations where the shareholders are not happy with such an arrangement and instead use a Shareholders Agreement, which can either provide a more equal distribution of power and protect a minority from exploitation, or give certain shareholders increased power. The usual way to regulate the relationship between shareholders is through a Shareholders Agreement. The shareholders can agree virtually anything among themselves. What they put into a Shareholders Agreement is therefore entirely up to them and is entirely confidential – it is not registered at Companies House.