Shareholder Agreements

A shareholder agreement is a private contract between the owners of a company that sets out how the business will be run, how decisions will be made, and how shares may be dealt with. While not a legal requirement under Jersey law, such agreements are widely used to provide clarity, reduce risk, and manage expectations among shareholders.

At Parslows LLP, we advise on the drafting and negotiation of shareholder agreements for Jersey companies. Our work includes preparing bespoke agreements that reflect the specific needs of the parties and the structure of the business. We also review existing arrangements and advise on amendments where circumstances have changed or new shareholders are introduced.

The scope of a shareholder agreement can vary depending on the nature of the business and the relationship between the parties. Common provisions include rules around decision-making, voting rights, dividend policy, share transfers, dispute resolution, and exit strategies. Agreements may also include protections for minority shareholders, restrictions on competition, and confidentiality obligations.

In Jersey, the Articles of Association form the constitutional framework of a company. However, they are publicly filed and limited in scope. A shareholder agreement complements the Articles by setting out additional terms that are binding only on the parties to the agreement. This allows for greater flexibility and privacy, particularly in businesses with complex ownership structures or sensitive commercial arrangements.

Our team is familiar with the interaction between shareholder agreements and company Articles, and we ensure that any inconsistencies are addressed to avoid unintended legal consequences. Where necessary, we assist with amending Articles to align with the terms of the shareholder agreement.

Our approach is focused on clarity and practicality. We take the time to understand the business, the roles of the shareholders, and the potential areas of friction. This allows us to draft agreements that are not only legally sound but also workable in practice. We also advise on enforcement and remedies in the event of breach, including options for dispute resolution and court proceedings under Jersey law.

Whether you are setting up a new company, bringing in investors, or reviewing existing arrangements, a well-drafted shareholder agreement can provide clarity and reduce the risk of future disputes. At Parslows LLP, we offer tailored advice and documentation that reflects the realities of doing business in Jersey.

To discuss your requirements or review your current shareholder arrangements, contact us for a confidential consultation.