As a shareholder of a growing business, it’s essential to have a shareholders agreement in place to protect your investment and ensure that everyone involved is on the same page. One type of shareholders agreement is the EIS shareholders agreement, which is designed specifically for companies that have received investment through the UK’s Enterprise Investment Scheme (EIS).
The EIS scheme provides tax relief to individuals who invest in small, growing companies. This can make it easier for these companies to raise the capital they need to expand and develop their business. However, to qualify for EIS investment, a company must meet certain criteria, such as having fewer than 250 employees and less than £15 million in gross assets.
An EIS shareholders agreement is a legal document that outlines the terms and conditions of the investment, as well as the rights and responsibilities of the shareholders involved. This can include details on how the company will be managed, how decisions will be made, and how profits will be distributed.
One key feature of an EIS shareholders agreement is the protection it provides for the investors. This can include clauses that prevent the company from taking on too much debt, selling assets without consent, or altering the business plan without agreement from the shareholders.
Another important aspect of an EIS shareholders agreement is the provision for the investors to have a say in the management of the company. This can include the ability to appoint directors, vote on major decisions, and receive regular updates on the company’s performance.
Finally, an EIS shareholders agreement can also set out the process for resolving disputes between shareholders. This can help to prevent disagreements from escalating into more serious issues that could endanger the future of the company.
Overall, an EIS shareholders agreement is an important tool for both the investors and the company itself. By setting out clear terms and conditions that everyone can agree to, it can provide the stability and security needed for a growing business to succeed.