One key element of running any business has to be corporate relations, although it is something that is often put on the back burner and remains unaddressed until a problem arises.
When setting up a company, nobody wants to think about the possibility of a disagreement or dispute arising amongst colleagues, however, inevitably this is something which will occur from time to time, especially when running a large company, and therefore having a system in place for dealing with problems if and when they arise is essential for any organisation in order to prevent an expensive, stressful and complex problem arising in the future.
A team of specialist corporate relations solicitors can help to prevent such a situation from arising in the first place by working out a procedure which can be put in place should an unexpected event or split in the company take place at a future point.
Drawing Up A Shareholder Agreement
While planning for every possible eventuality is impossible, a shareholder agreement is an essential component of setting up a company. Some of the major areas to consider include defining shareholders and directors salaries and bonuses, the transfer of shares, approving changes in the direction of the business, managing any changes over the roles that shareholders play, loan agreements, competition and future trading, exit policies, joint ventures and what should happen if a shareholder has to leave in negative circumstances. It is also important to identify shareholders’ interests and shareholder value, as well as to identify who should take decisions on behalf of the business. Needless to say, all of this is highly complex and in order to ensure that everything is drawn up correctly and in compliance with legislation, help from a legal expert in the corporate relations field is essential.
Joint ventures are a business arrangement during which two (or more) parties decide to pool resources in order to accomplish a specified task, whether a business activity or new project. In a JV, each participant holds responsibility for losses, costs and profits, however each venture remains an entity in its own right and remains separate from the business interests of its participant.
While a joint venture is a partnership of sorts, a JV can take on a legal structure of any form, for example and LLC, corporation or partnership. Both small and larger companies can combine in a JV to tackle large or small deals or projects. A joint venture agreement is an essential component of forming a JV for any purpose, and must be drawn up correctly to legally protect its participants. This document will set out the obligations and rights of the partners as well as the JV’s objectives, the partners’ initial contributions, its day to day operation and the responsibility for loss or right to profit of the JV. In order to avoid future litigation , it is vital to obtain professional legal guidance when drawing up this document.
An investment agreement provides the legal framework that defines the parties involved in a venture capital investment’s relationship. Dealing with the management’s principal obligations as well as those of the investor and the company, it not only outlines the situation at the time of the investment being made but also throughout its lifespan. All parties need to be effectively protected through this agreement in terms of due diligence processes, failsafe conditions, the regulation of rights to information, restrictions on management, the extent of warranties by shareholders and what should happen should the management be underperforming. By drawing up an appropriate investment agreement, consistency will be guaranteed, and parties will be able to maintain a positive working relationship throughout the life of the project. As venture capital investment is very risky, it is essential to seek legal advice to draft this document in order to ensure that everything complies with the law.
How Can We Help?
We can help with numerous areas of corporate relations including:
- Drawing up shareholder agreements
- Forming new companies
- Joint ventures
- Limited liability partnerships
- Investment agreements
- Employee incentive schemes
We can advise on any element of corporate relations and ensure that your company is well protected during any venture, scheme start up or investment.