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Shareholder agreement / Partnership agreement in Gothenburg and Kungsbacka
We help our clients feel secure in their business ownership
Why is a shareholders’ agreement necessary?
Good co-operation between the partners of the company (limited liability company) today is no guarantee that it will run smoothly in the future. The co-operation may be put under strain by an unexpected event, either in the company or in the partners’ private lives. For example, a partner may want to stop working, sell their shares, undergo a divorce, suffer a long-term illness or die. A shareholders’ agreement gives the partners certainty about how some matters will be handled and helps avoid unnecessary conflicts and potentially costly disputes in the future.
It is important to recognise that there is no law requiring partners to draw up a shareholders’ agreement. There is also no legal provision on how a shareholders’ agreement should be drafted and what it should contain. Unlike the articles of association, a shareholders’ agreement is not a public document. It can therefore contain agreements between shareholders on more specific and sensitive issues. For example, a shareholders’ agreement is often of great importance to a minority shareholder, who may benefit from stronger minority protection than that provided by the Companies Act.
Partnerships and Limited Partnerships, unlike limited companies, are formed by an agreement between the owners. These types of companies are regulated by law. However, it is common for legislation to be replaced or supplemented by specific rules in the agreement between the owners regarding the nature, operation and termination of the co-operation.
Once a shareholders’ agreement has been drawn up, the partners must regularly keep it up to date. The agreement needs to be updated as the company’s operations and shareholder relationships change. At Advokatfirman Glimstedt, we help you as an entrepreneur throughout the journey.
What is usually addressed in a shareholders’ agreement?
A shareholders‘ agreement (often called a partnership agreement), together with the articles of association and the Companies Act, regulates the cooperation between the partners of a limited liability company. In a shareholders’ agreement, the partners can determine how the business is to be run and establish rules for various situations. Below are examples of issues that partners often choose to address in a shareholders’ agreement.
1. Decision-making: how should decisions be made in the company? Is a qualified majority sufficient or should there be total consensus in favour of the minority shareholders? A contractual clause on decision-making is important to avoid deadlock and deal with different opinions.
2. Board of directors: who should sit on the board? How should the board be appointed?
3. Day-to-day work: how should the day-to-day work be organised? To avoid ambiguity, it is useful to include a condition relating to responsibilities, workload, salaries, holidays, etc.
4. Financing: what happens if the company operates at a loss or experiences a liquidity shortage? Should the partners be required to contribute money to the company in such cases?
5. Ownership: Does a shareholder need to be an employee of the company? What happens if a shareholder wants to sell their shares? Should the other shareholders have the right to purchase the shares? If so, how should the price of the shares be calculated?
6. Personal circumstances: What happens to a shareholder’s shares if he or she is on long-term sick leave or dies? Should a partner who is married or about to get married leave the shares as marital property or should they be designated as separate property in a prenuptial agreement?
7. Competition and confidentiality: should there be a prohibition on engaging in or supporting activities that compete with those of the company? Should the same apply both during the term of the agreement and after its termination?
Do you need help with shareholder/partnership agreements?
By assisting with legal and business assessments of, among other things, shareholders’ agreements/partnership agreements, we help our clients feel secure in their business ownership.
As our client, you can feel secure in your role as a business owner!
Our Expert Lawyers in Commercial Law – Gothenburg and Kungsbacka
Niclas Elison
Martin Wahlin
Otto Hansson Johansson
Erik Lindskog
Advokatfirman Glimstedt has eleven offices in Sweden and three in the Baltic States. Visit www.glimstedt.se to learn more about our entire business.