Corporate & Company Law, Done Properly

A shareholders agreement is a private contract between a company's owners setting out how the company is run, how shares can be transferred, and what happens when an owner leaves or the owners disagree. You need one whenever there is more than one shareholder: without it, the Companies Act 2006 and the company's articles fill the gaps, and those defaults rarely reflect what the founders actually intended — for example, a 50/50 split with no deadlock mechanism can paralyse the business. It is far cheaper to agree the terms while everyone is on good terms than to litigate them later.

A director owes seven general statutory duties under sections 171 to 177 of the Companies Act 2006. In short: act within your powers (s171), promote the success of the company for its members (s172), exercise independent judgment (s173), exercise reasonable care, skill and diligence (s174), avoid conflicts of interest (s175), not accept benefits from third parties (s176), and declare any interest in a proposed transaction (s177). These duties are owed to the company itself. They matter most when a company is in financial difficulty, when the focus can shift toward creditors and personal exposure rises, so take advice early.

Most owner-managed business sales complete in roughly three to six months from agreed heads of terms, though it varies with deal size, diligence and the buyer's funding. The main stages are heads of terms, buyer due diligence, negotiating the share purchase agreement and disclosure letter, and then completion. Deals slow down most often because the seller's records — contracts, IP ownership, employment paperwork — are not in order, so preparing the company before you go to market is the single biggest time-saver.

In a share sale you sell the shares in the company, so the buyer takes the whole entity including its history, liabilities and contracts; in an asset sale you sell selected assets and the company shell stays with the seller. Sellers usually prefer a share sale because it is a cleaner exit and often more tax-efficient, while buyers often prefer an asset sale to leave unknown liabilities behind. The right route depends on tax, the contracts involved, and how much risk each side will accept — it should be decided before heads of terms are signed.

An Enterprise Management Incentive (EMI) scheme is a tax-advantaged way for qualifying smaller UK companies to grant share options to employees, letting them buy shares later at a price fixed today. It is widely used by startups and scale-ups to recruit and retain key people without paying large salaries, and it carries favourable tax treatment for both the company and the employee when set up correctly. Eligibility depends on the company's size, trade and the individual employee, and the option terms and valuation must be documented properly, so it is worth getting the scheme designed rather than copied from a template.

It depends on the matter, and we give you a tailored fee quote when you instruct us: our hourly rates of £145 to £350 plus VAT, depending on the nature of the work and the seniority of the person acting, or a fixed fee, staged fixed fees or a price estimate agreed in writing before chargeable work begins. Ongoing support can be on a fixed monthly retainer. Ai Law's published company fees include £120 plus VAT to set up a UK limited company and £350 a year to maintain its statutory books. Disbursements such as Companies House fees are charged at cost and flagged in advance.