Shareholder agreements govern the relations among shareholders in privately held firms, such as joint ventures or venture capital-backed firms. An explanation for the use of put and call options, tag-along rights, drag-along rights, demand rights, piggy-back rights, and catch-up clauses in shareholder agreements. We view these clauses as serving (1) to induce the parties to make ex ante investments, (2) to preclude a party from engaging in ex post transfers, and (3) to achieve the efficient ex post allocation of stakes in the firm. Shareholder agreements specify the rights and duties of shareholders when those prescribed by law and regulation are thought not to be appropriate. Shareholder agreements are used mostly by companies with at least some shareholders actively involved in the management of the company.
What is the structure of the company and how is equity divided among shareholders? Should the agreement be unanimous and involve all (or just some) of the shareholders? Who owns or will own shares the parties to the agreement. Are there vesting provisions shares may be subject to cancellation is a shareholder/manager quits. Are shareholders allowed to pledge or hypothecate their shares? Who is on the Board? What about outside board members? Who are the officers and managers? What constitutes a quorum for meetings? What are the restrictions on new equity issues, e.g. anti-dilution aspects, pre-emptive rights and tag-along provisions? How are ownership buyouts to be handled? (e.g. shotgun clause approach versus voluntary sale approach). How are disputes to be resolved among shareholders arbitration clause? How are share sales handled? e.g.
first right of refusal. What are shareholders' obligations and commitment? What are shareholders' rights? What information, financial statements, reports, etc. can shareholders access? What happens in the event of death/incapacity? How is a share valuation determined to buy out an estate in the event of death is life insurance required? Funding for purchase of shares from estate or for key person insurance. What are the operating guidelines or restrictions (budget approvals, spending limits banking, etc. What types of decisions require unanimous board and/or unanimous shareholder approval? Compensation issues - remuneration of officers & directors, dividend policies are other agreements required as well, e.g. management contracts, confidentialit
y agreements, patent rights, etc? Should there be any restrictions on shareholders with respect to competing interests? What could trigger the dissolution of the business? What is the liability exposure and is there any corporate indemnification (and insurance)? Who are the company's professional advisors (legal, audit, etc.)? Are there any financial obligations by shareholders (bank guarantees, shareholder loans, etc)?
Shareholders' agreements, properly structured and funded, are a critical part of any business with more than one shareholder. A well-thought-out agreement provides an orderly way to transfer shares in the business and helps keep the business running smoothly in the face of future events such as death, disability or retirement of a shareholder.
These agreements generally establish a purchaser for the shares of the deceased or existing shareholder, a formula for determining the purchase price of the shares, and a method for funding the purchase. A venture capitalist who does not acquire control with his purchase of company stock will usually require a shareholders' agreement as a condition of funding. Management that sells a controlling interest in its company's common stock normally insists upon a shareholders' agreement to ensure its continued ability to run the company.
Shareholders' agreements often contain other provisions affecting management and its relationship with its investors. These provisions commonly contain limitations on the manager's ability to sell his shares to outsiders and provide for the disposition of his shares in the event of his death or termination of employment.
Shareholders' agreements are also commonly used for estate planning purposes. Management should consider shareholders' agreements carefully. They should have a limited term and, in most cases, should terminate in the event of a public offering of the company's stock or sale of the company.
Our Shareholders Agreement can be used where two or more parties wish to carry on business together as a limited company and wish to regulate the relationship between shareholders and determine actions in the event of deadlock. It is suitable for a group of shareholders working together who wish to arrange for particular management decisions (relating to the structure of the company) to be taken unanimously and allows each shareholder to appoint one director.
You can insert the names and details of the parties involved, and the wizard will format the document accordingly.
A bankrupt person may not be appointed as a director. If a director becomes bankrupt after appointment, he must immediately resign as a director unless leave to continue is given by the courts. A person who has had a disqualification order made against him may not act as a company director. The auditor of a company cannot also be a director or company secretary of that company. A director of an insolvent company cannot, without the leave of the court, be appointed as a director of a company with a prohibited name. The company secretary cannot also be the sole director of the company. A director aged over 70 may not be appointed to a public company or a subsidiary of a public company.
This exclusion can be overcome if the company's Articles exclude Table A, Regulation 81 and the appointment is approved by the shareholders of the company. In addition the Act and Articles of Association may provide further instances where appointment may not be made or may cease.
This is our most popular package with UK residents, and includes: -
The registration of your company from scratch using your own registered office address, and appoint your own candidates to the roles of director, secretary (if needed), and shareholder;
The standard capital on formation is £1.00, this is divided into 1.00 ordinary share valued at £1.00 (a minimum of one share must be issued);
The formation of a limited company usually takes as little as four to six hours from the time that your application and payment are received by Coddan;
The government fee for incorporation is included in the price of this package;
The following documents, which need to be printed and signed, will be emailed to you upon formation of your company: -
A certificate of incorporation (requires PDF file reader);
The memorandum & articles of association (requires MS-Word file reader);
The first meeting of the board of directors (requires MS-Word file reader);
Share certificates and a company register (requires MS-Word file reader).
Economy Package
£ 82.00
Annual Maintenance Fee £50.00
This is our most popular package with UK and EU residents, and includes: -
The registration your company from scratch using one of our registered office addresses, and appoint your own candidates to the roles of director, secretary (if needed), and shareholder;
The standard capital on formation is £1.00, this is divided into 1.00 ordinary share valued at £1.00 (a minimum of one share must be issued);
The formation of a limited company usually takes as little as four to six hours from the time that your application and payment are received by Coddan;
The government fee for incorporation is included in the price of this package;
The provision of a registered office address for 12 months is also included in the price of this package (our registered office address service is charged annually);
The following documents, which need to be printed and signed, will be emailed to you upon formation of your company: -
A certificate of incorporation (requires PDF file reader);
The memorandum & articles of association (requires MS-Word file reader);
The first meeting of the board of directors (requires MS-Word file reader);
Share certificates and a company register (requires MS-Word file reader).
Premier Package
£ 207.00
Annual Maintenance Fee £175.00
This is another one very popular package for small and medium size businesses, such as those being run by a sole director from home, and for companies owned by overseas residents who still need a local registered office address but would rather not open local offices;
This package is often chosen by such customers, who are looking to minimise a sole director personal liability (and who are not quite familiar with the new UK corporate legislation), because this package includes a provision of a nominee secretary for 12 months. This package is also includes: -
The registration your company from scratch using one of our registered office addresses, and appoint your own candidates to the roles of director, and shareholder;
The standard capital on formation is £1.00, this is divided into 1.00 ordinary share valued at £1.00 (a minimum of one share must be issued);
The formation of a limited company usually takes as little as four to six hours from the time that your application and payment are received by Coddan;
The government fee for incorporation is included in the price of this package;
The provision of a registered office address for 12 months is included in the price of this package (our registered office address service is charged annually);
The provision of a nominee secretary for 12 months is also included in the price of this package (our nominee secretary service is charged annually);
The following hard bound copy of corporate documents, will be posted to you upon formation of your company: -
A laminated copy of the certificate of incorporation of your company;
A hard bound copy of the memorandum and articles of association;
A hard bound copy of the minutes of the first meeting of directors;
Share certificates, and your company register.
Deluxe Package
£ 557.00
Annual Maintenance Fee £525.00
The Deluxe limited company package is a fast and easy option, it is ideal for the UK, EU, and international small to medium businesses who wish to appoint a nominee director and a nominee secretary in order to maintain anonymity, and it includes: -
Incorporation of your company from scratch using one of our registered office addresses in London, our nominee director and nominee secretary. We can appoint your own candidate(s) to the role of shareholder(s), or you can appoint a nominee sharholder provided by Coddan;
The standard capital on formation is £1.00, this is divided into 1.00 ordinary share valued at £1.00 (a minimum of one share must be issued);
The formation of a limited company usually takes as little as four to six hours from the time that your application and payment are received by Coddan;
The government fee for incorporation is included in the price of this package;
The provision of a registered office address for 12 months is included in the price of this package (our registered office address service is charged annually);
The provision of a nominee secretary for 12 months is included in the price of this package (our nominee secretary service is charged annually);
The provision of a nominee director for 12 months is also included in the price of this package (our nominee director service is charged annually);
The following two hard bound copies of corporate documents, will be posted to you upon formation of your company: -
A laminated copy of the certificate of incorporation of your company;
A hard bound copy of the memorandum and articles of association;
A hard bound copy of the minutes of the first meeting of directors;
Share certificates, and your company register;
The general power of attorney signed by a nominee director;
Pre-signed, undated resignation letter from a nominee director;
The agreement for the provision of nominee service and indemnification of nominee.
Legal Requirements to Register an LTD
A private company limited by shares in England and Wales must have at least one director, one shareholder, and may have a secretary.
You need at least one person to form this type of company. If there is only one director, and that director is a natural person in your company, that director can also act as the secretary.
A company must have at least one director who is a natural person. This requirement is met if the office of director is held by a natural person as a corporation sole or otherwise by virtue of an office.
You can register a sole director' company, if you are familiar with the secretaries duties and responsibilities, because all of them belongs to a sole director.
The directors and secretary of your company can also be shareholders.
The Companies Act imposes no restriction on the minimum age of company directors. However Companies House will actively discourage the appointment of anyone under the age of 16 from taking up a company directorship on the grounds that the individuals concerned may not fully understand the legal liabilities that go with the position and for the most part will not have the experience necessary to perform the duties of a company director.
Under the Companies Act 2006, there is no restriction on any or all of the members/shareholders being from an overseas country (i.e. outside the United Kingdom in terms of residency, domicile, citizenship, place of incorporation or all or any of those concepts).
There is no requirement for the officers of your company to be UK citizens or residents, nor for them to hold valid work permits.
Owning, or being an officer of a UK company does not, however, grant you any right to live or work in the UK if you are a foreign national.
Your company must have a registered office address within England or Wales; this is the official address of your company and will be on the public record as such.
Your company must hold its official company documents at its registered office address: its register of shareholders, and its constitutional documents.
So long as you maintain a registered office address in England or Wales, you can conduct your business from any place in the world: you do not have to run your business from your registered office address.
The term "dormant" applies to a company that, in legal terms, has "no significant accounting transactions" during a financial year. It is not the same as a "non-trading company", a term that has no legal meaning. No significant accounting transactions means no entries in the company's accounting records. The amount paid for shares when the company is first formed and a few costs that the company may incur in order to keep the company registered at Companies House do not count as significant accounting transactions.
WHAT IS THE DIFFERENCE BETWEEN A NON-TRADING COMPANY AND A DORMANT COMPANY?
A company can be non-trading in the sense that it isn't doing business. But it may still have other accounting transactions going through its books, which means that it is not dormant in a legal sense. A dormant company must not have any accounting transactions except specific allowable transactions that can be disregarded.
WHY HAVE A DORMANT COMPANY?
Companies can be dormant for various reasons, often to protect a company name, in readiness for a future project, or to hold an asset or intellectual property. Some flat management companies whose main purpose is to own the head lease or the freehold of a property choose to become dormant by setting up a residents' association to deal with any expenses.
A company can remain dormant for as long as necessary - indefinitely if, for example, its purpose it just to prevent the name being used by another company. However, there are expenses associated with keeping a company on the register. And, while the company is dormant, various other documents and annual company balance sheets must still be prepared and filed at Companies House. The company will have to decide how expenses will be met and who will run the company and be responsible for ensuring that all the legal requirements are met.
WHO RUNS A DORMANT COMPANY?
If it is to remain dormant, a company cannot have paid employees because their wages would have to be recorded in the accounting records. However, all companies, including those that are dormant, must have: at least one director for a private company (two directors for a public company); and a company secretary.
NB: A sole director cannot also be the company secretary. There MUST be at least two officers of the company.
WHAT RESPONSIBILITIES DO THE OFFICERS OF A DORMANT COMPANY HAVE?
The responsibilities of a dormant company's officers are the same as for those of a trading company. The directors and secretary manage the company on behalf of the shareholders or members. Among other things, they are responsible for holding meetings and ensuring that all the necessary returns, accounts and other documents reach Companies House by the due date.
WHAT HAPPENS IF DOCUMENTS ARE NOT DELIVERED TO COMPANIES HOUSE?
The company's officers could be prosecuted because they are personally responsible for ensuring that documents are delivered on time. Failing to do so is a criminal offence. In addition, there will always be an automatic civil penalty for filing accounts late. Companies House could also reasonably assume that the company is no longer required and strike it from the register. If a company is struck off the register, it ceases to exist and its assets become Crown property.
Check Your Order Status
£ 32.00
This is our most popular package with UK residents, and includes: -
The registration of your company from scratch using your own registered office address, and appoint your own candidates to the roles of director, secretary (if needed), and shareholder;
The provision of a registered office address for 12 months is also included in the price of this package (our registered office address service is charged annually);
