Shareholders’ Agreement

Maintaining a business relationship with multiple partners requires a certain extent of preparation. The allocation of the rights and obligations, associated with various aspects of a company’s activities is crucial. Some of the points, which have to be agreed are: procurement of the ownership interest of each shareholder, calculation of dividends / other payments, structure of the shareholders’ participation in the company’s management, distribution of the assets, and exit conditions of any business partner.

Contacting us at the planning stage of business to prepare shareholders’ agreement for the potential partners is highly recommended. However, our practice shows that most of the owners become interested in such agreements when a conflict between partners is already brewing, mostly when the business is operational. Our experts are ready to provide the necessary legal assistance at any stage, however, they recommend familiarizing with the do-s and don’t-s of a shareholders’ agreement in the early days of a joint venture.

Some examples of successfully resolved issues through the use of shareholder agreements are:

• Issues aroused from joint management since the very beginning of the business venture;
• The introduction of a new owner in an existing business (as in the process of share transitions from a retiring owner to the company, as well as in cases of redistribution of existing shares);
• Temporary entrance of an external contractor into the company (such situation may arise when imbedding external creditors and securing the loan with company shares, which in turn could be repurchased by their original owners);
• Creation of a new joint project with the participation of independent companies.

Shareholders’ agreements are regulated by the Russian law, however, they are relatively new for Russia. This type of agreement is widely used in other foreign countries (in particular, in the Anglo-Saxon legal system). Majority of contemporary businesses have foreign companies in their structures (as holdings or representatives of individual shareholders), which makes it rational for the shareholders agreements to be signed under the applicable law.

Based on our initial contact with the client, our experts create and individual action plan. Once it is created and approved by the client, we can begin its realisation. The hourly rate of our expert is 10 000 rubles.

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