Good governance processes, mechanisms and relations are an essential part of an organisation’s structure and management.
Ensuring your organisation has effective procedures and processes in place will in turn enable it to operate effectively in achieving its objectives.
At Girlings, our range of extensive governance services cater for organisations seeking advice on governance procedures, through to effective governance reporting and ensuring your organisation is compliant with the law.
For companies with multiple shareholders, having a Shareholders’ Agreement in place can be invaluable in offering protection to minority and majority shareholders, regulating the transfer of shares, governing decision-making, imposing restrictions on shareholders who leave a business and much more.
Articles of Association are a company’s key document in terms of dealing with how the company is governed. We regularly assist our corporate clients with putting in place bespoke Articles of Association so your company can be governed with more flexibility than it would otherwise have under the standard Articles of Association provided for by the Companies Act 2006.
Our corporate team is experienced in advising independent economic entities on the incorporation and structuring of joint ventures with shared ownership and governance structures, to enable them to proceed with their required projects.
Our experience and expertise in conducting governance reviews ensures organisations are not only kept up to date with latest best practice and changes to the law but also provides a key opportunity to reflect on your governance arrangements and account for changes to the organisation’s size.
There are a number of ways in which a shareholder dispute can arise, with common reasons including a disagreement arising over the management and direction of a company. Girlings is able to assist with shareholder disputes so the parties understand their legal rights under the company’s Articles of Association and any Shareholders’ Agreement that may be in place, together with the options that are available to them in resolving such disputes.
Girlings is able to offer extensive knowledge, experience and expertise in advising businesses operating as Partnerships and LLPs as well as individual partners and LLP members on both non-contentious and contentious aspects of their business relationship.
For further advice, please contact a member of our Corporate, Banking & Finance team. Girlings has offices in Canterbury, Ashford and Herne Bay.
The most suitable structure will depend on the circumstances of the business and it is worth seeking tax advice from a professional at this stage.
The most common choices are either a partnership or limited company. A partnership can be run with relative informality but, of course, you will not benefit from limited liability as you would if the business was run as a limited company. This means that you would be personally liable for the liabilities of the business.
Once you have decided on a structure that is best for your business, you will need to set out the rules that should be followed in the running of the business. If you are running a Partnership, the rules would be set out in a partnership agreement. If you are running a Limited Company the rules will be set out in the articles of association. These rules are crucial in not only setting out the day-to-day running of the business but also planning for the future. For example, it would be common for a company’s articles of association to, amongst other things, include pre-emption rights giving the remaining shareholders first right of refusal over the shares of a shareholder who wishes to sell up and leave the business. A mechanism for valuing the shares and agreeing a purchase price would also be included to minimise the risk of any disputes.
A company’s articles of association must be filed at Companies House and, as such, are public documents. You may also wish to enter into a shareholders’ agreement with your fellow shareholders setting out any further agreements between you that you wish to keep confidential, perhaps regarding business financing or long-term strategy.
The setting up of a new business is an exciting and extremely busy time. Adopting standard articles or proceeding without a written partnership agreement can seem attractive in saving time and cost in the short term. However, they are crucial documents that set out the company’s structure and rules which if agreed at the outset can avoid protracted and expensive arguments in the future and secure the stability of the business.
