Glossary for Shareholders’ Agreements.

Shareholders’ Agreements Glossary: Terms to know about Shareholders’ Agreements.

Shareholder disputes are amongst the most challenging areas of work for legal advisers, there are many legal terms used when dealing with this sector.
Below is a list of terms and a description of what they refer to.

Bad Leaver

Bad Leaver is an employee-shareholder who leaves employment in circumstances where shares may be acquired at less than their fair value.

Call Option

Call option is the right to buy the shares of a person which may be triggered by that person ceasing to be employed. This could be at a pre-agreed price or by reference to a third-party valuation.

Chairman’s Casting Vote

Chairman’s casting vote refers to the right for the chairman of any meeting to have a second vote in the event of a tied vote. This right can be exercised at a Board Meeting if directors’ votes are equal. It may also be exercised at a shareholders’ meeting but not for a company incorporated after 1 October 2007.

Fair Value

Fair Value is the market value of a share but with no discount applied by reason of the shares representing a minority interest. Under ordinary principles of valuation, shares representing less than 50% may be ascribed a lower value per share. The same principle may apply to a small minority shareholding that cannot block a special resolution (i.e., less than 25%).

Our Shareholder Agreement Law Expertise

Shareholders’ agreements are highly bespoke documents which can range from the very simple to the very complex.

Our Corporate law team routinely assists with the preparation of shareholders’ agreements and we will discuss and work with you to identify your requirements.

Every shareholder agreement will involve detailed consideration of the obligations of each shareholder, and we will be there to advise you and guide you through all the issues and potential pitfalls that you should consider.

2024 The Legal 500

The 2024 edition of The Legal 500 states that “underpinned by strong cross-office collaboration, Lanyon Bowdler’s ‘knowledge, advice, and expertise’ makes them a key port of call for a host of corporate clients. Shrewsbury-based Gráinne Walters is an ‘excellent’ adviser whose wide-ranging client base spans the consumer goods, education, care, and industrials sectors, to name a few. ‘Highly experienced and extremely knowledgeable’, Ludlow-based Edward Burrell’s recent workload includes both M&A and restructuring mandates, while Conwy-based Jennifer Edwards is noted for her significant experience in asset sales.”

Chambers UK Recommendation

The 2024 edition of Chambers UK recognised the team, saying: “Lanyon Bowdler offers expertise in a wide range of legal services. It has vast knowledge of such areas as acquisitions, sales, mergers, management buyouts and buy-ins, investments, reorganisations, and commercial contracts, among many others. The department has noted skills in sectors such as agriculture, education and renewable energy supply.” One client enthuses: “Their work is thorough and the key matters are understood in detail.” Other sources say “Outstanding levels of client service from the partner level down.” and “Lanyon Bowdler are diligent, knowledgeable and take a professional approach to providing advice.”

Good Leaver

Good Leaver is an employee-shareholder who is entitled to be paid fair value for their shares if they cease to be employed.

Inquorate

Inquorate means a meeting that lacks a quorum.

Model Articles

Model Articles were introduced following the enactment of the Companies Act 2006 and set down a standard constitution for a private company and a public company incorporated after 1 October 2009. A company is free to modify the Model Articles provided the amendments comply with the Companies Act 2006.

Ordinary Resolution

Ordinary Resolution is a resolution passed by the holders of most of the voting shares.

Partners

A Partner is the relationship between two or more persons in business together and where there will be a mutual duty of confidence and trust.

Testimonials

What our clients say.

From the first contact, the team at Lanyon Bowdler gave a fast & efficient service. They were very friendly & gave me the confidence that I had found the right solicitors. The advice given & the fast responses were beyond my expectations. The matter was resolved in no time at all.

Martyn
via ReviewSolicitors

Having recently used Lanyon Bowdler for the sale of a business, we had no hestitation in contacting Edward Burrell again to represent us in the purchase of another company. His advice and judgement was always spot on and his personal dedication towards achieving our objectives and getting the best possible outcome for his clients was impressive.

Tim
via ReviewSolicitors

Got the advice I needed to help me with my business, always available when needed.

Duncan
via ReviewSolicitors

Our company needed some advice quite urgently and Lanyon Bowdler dealt with everything quickly and efficiently.

Debbie
via ReviewSolicitors

Since dealing with Lanyon Bowdler they have been diligent, efficient and at all times very helpful along with being structured in dealing with matters, fees and clarity on all levels. Thank you.

Michael
via ReviewSolicitors

I was clearly informed of progress step by step. The service you provided was very good.

Peter Weston
Shrewsbury

All work carried out effectively and efficiently.

Hubert Jones
via ReviewSolicitors

Smooth and efficient service from very professional firm.

Tim
via ReviewSolicitors

An excellent service with solicitors that you can talk to and who give you a clear understanding of all necessary legal implications and interpretations.

Eric
via ReviewSolicitors

From start to finish we had excellent service. Friendly, approachable and professional.

Carl Gittins
via ReviewSolicitors

Very clear, concise advice and guidance, easy to understand.

Ian Jamieson
Telford

Good service provided throughout with clear communication throughout with all options explored.

Lee

I can thoroughly recommend the highly professional and supportive service received over the last few months.

Heather
via ReviewSolicitors

Responsive, supportive, approachable, clear and empathetic.

Lisa Thacker

Professional and prompt communication. Supportive and client focused.

Lisa Thacker
Jennifer M Whittall Ltd

Whenever I have had need to contact Lanyon Bowdler I have always received a fast, concise and friendly response.

Lee Mortimer
UK Case Management

Definitely would use Lanyon Bowdler again if I need the use of a solicitor.

Mark Bowkett
via ReviewSolicitors

Smooth and efficient service from very professional firm.

Tim
via ReviewSolicitors

We were particularly impressed with the quality of work, the speed and excellent communication.

Allenby Douglas Ltd
Oswestry

Greatly exceeded my expectations!

Worxinfo Limited
Coventry

Very friendly and approachable. Very good advice

Ivor Brown
via ReviewSolicitors

Great Service; Lanyon Bowdler were excellent from the outset. Straightforward and easy process. I just sat back and waited.

Paul Rowe
via ReviewSolicitors

Everything has been professional, efficient and courteous throughout and we are very pleased, both with the service and with the eventual outcome of our case. Everything was first class and exceeded our expectations. Thank you again for providing such splendid service. It is really appreciated.

Mr N J & Dr S J Browne
Llanfyllin

Quorum

Quorum is the number of people who need to be present at a Board Meeting or General Meetings for it to be legally constituted so that decisions can be made.

Quasi-partnership

Quasi-partnership refers to a company formed by two or more shareholders in circumstances where they may be regarded as partners.

Rectification

This is the order of a Court requiring a change to the Register of Members.

Special Resolution

Special Resolution is a resolution passed by the holders of 75% or more of the voting shares.

Table A

Table A refers to Table A of the Companies Act 1948 or of the Companies (Tables A to F) Regulations 1985 as amended. This sets out the standard constitution of a private or a public company that can be modified in the company’s own Articles of Association. For companies incorporated after 1 October 2009 a new standard set of Articles has been introduced: these are called the Model Articles

Contact Lanyon Bowdler Solicitors

Give us a call or complete our online enquiry form, to see how we can help. We have offices in Telford, Shrewsbury, Oswestry, Ludlow, Bromyard, Hereford & Conwy. We are able to act for clients wherever they may be in England or Wales.

Our people

Meet the team.

Gráinne Walters
Gráinne Walters
Partner
Corporate Law | Business Contracts | Business Sales & Purchases
Edward Burrell
Edward Burrell
Partner
Corporate Law | Business Contracts | Business Sales & Purchases | Leisure & Tourism | Education
David Ashcroft
David Ashcroft
Consultant
Corporate Law | Business Contracts | Business Sales & Purchases | Leisure & Tourism
Cecilia Wong
Cecilia Wong
Solicitor
Corporate Law | Business Contracts | Business Sales & Purchases
Abi Croft
Abi Croft
Solicitor
Corporate Law | Business Contracts | Business Sales & Purchases
Jennifer Edwards
Jennifer Edwards
Associate Solicitor
Corporate Law | Business Contracts | Business Sales & Purchases
Jemma Groves
Jemma Groves
Solicitor
Corporate Law | Business Contracts | Business Sales & Purchases | Education
Zoe Roberts
Zoe Roberts
Associate Solicitor
Business Contracts | Business Sales & Purchases | Corporate Law
Sam Russell
Sam Russell
Trainee Solicitor
Corporate Law | Business Contracts | Business Sales & Purchases
Knowledge

Latest knowledge.

Case Study
Paddle boarding in North Wales

Boltholes and Hideaways

We would heartily recommend Lanyon Bowdler to any business as the team structure enables the delivery of a comprehensive...
Juana Eastwood • 20 Mar 2024
Case Study
Oldfields Cider barrels

Oldfields Cider

We found the team to be exceptionally knowledgeable and efficient in resolving any problems quickly....
Edward Burrell • 19 Jan 2024
Case Study
Holmer Park, Herefordshire

Marches Leisure (The Shrewsbury Club) and Holmer Park Spa and Health Club (Herefordshire)

Corporate and commercial legal advice regarding business acquisitions....
Edward Burrell • 15 Dec 2023
Podcast icon Podcast

Starting a Business with Entrepreneur Ellie Beavan (Winsbury Dairy)

About setting up a business in the food industry, selling farm fresh pasteurised milk to shops, pubs and restaurants, an...
Published • 18 Sep 2023
Blog

Loan Agreements – Do I need Financial Condu...

It is very common for informal loans to be made between family members and friends but whilst the arrangement might...
Abi Croft • 01 Sep 2023
Blog

Top Tips For New Businesses

You have had a brilliant idea, the business plan is agreed and now you’re ready to start the business. Here are a f...
Zoe Roberts • 04 Jul 2023
Podcast icon Podcast

The Importance of Shareholders Agreements – Grainne Walters

We explain the differences between directors and shareholders, and how a shareholders agreement can detail how a shareho...
Published • 26 Jun 2023
Blog

Why Do I Need Written Contract Terms With M...

There is a phrase known as ‘over-lawyering’ and many businesses may feel that they have trusted re...
Zoe Roberts • 23 Jun 2023
Blog

Q&A: Focus on Warranty and Indemnity In...

Warranty and Indemnity Insurance, commonly referred to as W&I insurance, is often used in private mergers and a...
Zoe Roberts • 09 Mar 2022
Blog

Mistaken Filings at Companies House

Forgetting to file a form on time, including the wrong number in your calculations or simply misspelling a company’...
Gráinne Walters • 10 Jan 2022
Blog

Parental Responsibility Update

The removal of parental responsibility is the subject of many client enquiries. There are a large number of cases w...
Abi Croft • 22 Jul 2021
Accreditations

Our awards and accolades.

Contact us

Get in touch.

"*" indicates required fields

TOS*
Hidden
This field is for validation purposes and should be left unchanged.