Of Company Name Here Shareholder Agreement: Fill & Download for Free

Looking at what you have commented, there is a couple of things you need to absolutely do as quickly as you can before going forward. If you don’t, you will finding yourself disputing with your partners and maybe even causing your company to fail.The first thing you want to do is register your company. There are four different types of company structure that you can choose from. Don’t worry if later down the line you change your mind, you are able to switch between them. Let me quickly give you some details about each of them.Sole TraderA sole trader, as the name suggests, is a single individual running his or her own business. Although they can employ staff, they are the only person running the business and are singularly responsible for the success and failure of their ventures.The advantages of this are that they have full control of their ventures and can run the company as they please. They also retain all profits without paying out dividends and have complete privacy, contrarily registered companies are required to publically disclose their information.However, a sole trader is not seen as a separate entity from their company by law and they are subject to unlimited liability. This means that the individual running the business is held responsible for the company’s debts and are personally prosecutable for the business’ liabilities.2. PartnershipA partnership is a group of people, ranging from two to twenty, that have shared responsibility for a business.They are basically the same as that of a sole proprietorship. All partners fund the business, thus making it easier to raise capital than as a sole trader. With multiple owners, the partnership also takes advantage of shared responsibility, meaning that work can be split based on the different individuals’ skills.Partnerships have unlimited liability, meaning their personal income will suffer if the business fails. There is also a higher risk of disagreements and tax must be paid in the same way as sole traders, each submitting a self-assessment tax return and need to register as self-employed.3. Private Limited CompanyA private limited company is considered an entity in its own right and separate from its owners. This means that the founding entrepreneurs can keep their assets and finances separate from the business itself.The main advantage of a private limited company is that owners are subject to limited liability, meaning that the company in itself is seen as its own entity and creditors can only look for payment from the actual company, not its owners’ personal income. This, in turn, provides many advantages such as giving customers and suppliers more confidence in the business and many large organisations only deal with this form of company.The disadvantage is that there is a lot of administrative paperwork to file. The company information must also be on public display.4. Limited Liability Partnership (LLP)A limited liability partnership is a hybrid between a partnership and a limited liability company. This requires a minimum of two individuals each having shared responsibility but no maximum partners.The advantages are both those of a private limited company and those of a partnership. Therefore they are subject to limited liability, they also have flexibility as the operation of a partnership is determined by the agreement between the partners. They can designate members and not all partners need to be at the same level (senior or junior). As an LLP they can also protect their company name.LLP’s are subject to public disclosure: financial accounts need to be submitted to the Companies House for the private record. The income of every individual partner is taxed and profit cannot be retained in the same way as a private limited company.The second thing you want to do is get the right legal contracts in place in order to have a strong legal foundation and protect your business. Here two that I recommend you must have.Shareholders AgreementShareholders Agreement are fundamental, especially with multiple founders/partners. There are two main reasons for getting this agreement. The first is that it will state what happens to all the intellectual property (IP), aka the work done in the company. You can have it stated that all work done for the company, belongs to the company.This will protect you against a founder leaving the company and starting a similar company. The second is it states exactly what happens with the equity promised. So it can protect you from having a founder or partner leave with only after two months but with 50%.Within the shareholders agreement, you can also find the vesting clause. This clause further dictates the equity. The vesting cliff works like this, imagine you give 30% equity to you partner with a vesting period of four years and a one year cliff. The one year cliff means that the partner must work one whole year before they can start earning the equity. Then one year after that, so two years in total, the partner will earn 7.5% equity. Then each year after that, they will continue to earn 7.5% until four years have passed and they have earned the full 30%.2. Director Service AgreementDirector Service Agreement will state the obligations of the founders. Basically what everyone will be doing, how many hours they will commit to working and etc. This is essential in order to make sure that everyone is picking up their own weight and not freeloading.Sorry for the length but I hope this has given you more of an idea on how to protect your business and I wish you the best of luck!Also, Linkilaw is able to help you make sure your business kicks off with those strong legal foundations! So if you are interested in anything I mentioned above or have other legal needs for your business, please feel free to reach out directly to me or visit our website. We offer startups a FREE initial legal sessions, check it out!

Company Formation - you can do it aloneI would consider the UK - the government encourages entrepreneurship.It costs only £15 to register a company in the UK. The steps to set up a private limited company are quite simple. You need:A company nameAn address for the company (UK)At least one directorAt least one shareholderThe agreement of all the initial shareholders - memorandum of associationDetails of the company’s share and the rights attached to them - statement of capitalWritten rules about how the company works - articles of associationThen you can register online with the Companies House if you standard articles of association. Otherwise, you will have to register by post, using an agent or a third party software.You will also need to register for Corporation Tax within 3 months.Cap Tables, Term SheetsThat’s legal and should be drafted by a lawyer. At Linkilaw, we have qualified lawyers drafting quality contracts for entrepreneurs at a fraction of the cost!If you're unsure about what your startup requires legally, we offer a Free Startup Legal Session, we'll talk through your business and explain all your legal needs. Book a session here.

Okay, let's excise the situation that you are in and just focus on your goal point; the goal of /taking/buying back shares of company to exclude investor influence and decision making power.I guess there is a way to do this on a investment agreement contract level as-is IF said contract was constructed with certain functionalities.I'm sure there are different naming provisions or location of said function depending on 1) geography, 2) VC you're dealing with and 3) situation the term was built in but there should be a clause or sub-provision that denotes "transfer of shares".Said clause or provision gives the stakeholders the ability to buy existing shares from investors and depending on language of clause, consume common shares of company.The issue here is that "ToS" provision is - more often than not - given as a right to preferred share holder. Please see if the right of language is broad enough - for example "shareholders may" - for common shareholders such as founders have right to invoke a share acquisition.That being said there are also factors of how: 1) your contract interprets majority and 2) if it recognizes super majority, etc etc.Good luck.NOTE: Of course there are a bunch of other ways. I'm just writing one scenario