Friday, 25 April 2014

What is the Law in your Life?

5 things you need to know about a Shareholders' Agreement:

1.   What is a Shareholders' Agreement? A Shareholders' Agreement is a contract entered into among the company's shareholders which, together with the company's articles of association, creates the internal "rules" by which a company is governed.

2.   What areas does a Shareholders' Agreement cover? A Shareholders' Agreement can deal with all aspects of the relationship among the shareholders, including the rights and obligations of the parties.

3.   Specifically...? Protection of minority interests, control of decision-making at board and shareholder level, non-compete provisions, resolution of shareholder disputes, as well as defining the powers of the shareholders (and directors), and the procedures and limits within which the company operates.

4.   Anything else? A Shareholders' Agreement can also regulate share transfers - for example, if a shareholder leaves the company it is possible to have provisions in place to force such a shareholder to sell their shares back to the other shareholders.

5.   What happens to shares if a shareholder dies? Without a Shareholders' Agreement in place, the shareholder's beneficiaries may (or may not!) be able to take over the shares. A Shareholders' Agreement can provide certainty for all concerned - including allowing the surviving shareholders the right to purchase the deceased's shares before they are transferred to beneficiaries.

Friday, 4 April 2014

What is the Law in your Life?

5 things you need to know about rent payable under a lease:

1.   The rent payable must not be illusory.

2.   Rent will normally be paid quarterly, most likely on the Scottish Quarter Days. These may be the 28th of February, May, August and November if the "new" quarter days and the 2nd, 15th, 1st and 11th days of these months if the "old". Interest at a specified rate will be payable in the event of a late or non payment of rent.

3.   VAT may be chargeable on rent payments if the landlord has elected to opt to tax.

4.   The tenant may negotiate a rent free period prior to entry if market conditions so dictate or if works are required to the leased subjects.

5.   The annual rental may be subject to rent review at an agreed frequency during the period of the lease.