If you are running a limited company, or intending to establish one, you should consider drawing up a shareholders’ agreement. If you are a partner in a business you should consider drawing up a partnership agreement
A shareholders or a partnership agreement can be a brief or a comprehensive document. It can incorporate a number of different issues.
For shareholders this can include voting rights, pre-emption rights on share transfers, holiday entitlements for those actively involved in running the business, or specific areas of responsibility for individuals.
For partners a partnership agreement can incorporate a number of different issues such as, for example, specific areas of responsibility for individuals, provision of capital and division of profits but can also include provision for references and holiday entitlements for those actively involved in running the business.
The advantage of having such an agreement is that it pre-empts what might otherwise become contentious issues due to different understandings of what was originally “agreed” but not put down in writing