oardroom Re solve

email now

Home

The Problem

The Solution

Why It Works

Shareholders Agreements

SADIY

About Us

oardroom Resolve Home

Helping shareholders and directors focus more on their businesses

than on their differences

" You may have the greatest bunch of individual stars in the world, but if they don't play together, the club wont be worth a dime."

Babe Ruth

The Problem
The Problem Disputes between shareholders and directors within companies can be very damaging to the financial and trading well-being of the companies themselves. This is particularly so when the Board and shareholding is split evenly, thus often placing the company in a stalemate situation in which no one can make corporate decisions without the support of those with whom they are in dispute. The interests of the company itself is often overlooked as people fight to protect their own personal interests. For most companies, resolving situation is more difficult because they failed to enter into a Shareholders Agreement.Boardroom Resolve assists directors and shareholders to resolve their disputes in a much faster and less costly fashion than by pursuing legal remedies through the courts and tribunals or simply arguing or, worse, not speaking to each other.Importantly, as well as meetings and the telepone , we use online dispute resolution software to enable us to conduct part or all of the process online, thus saving even more valuable time and enabling immediate commencement in urgent cases. Accountants, lawyers and other professional advisors to companies can become involved in that process if they wish and where appropriate. We also can bring in skilled lawyers where appropriate who understand the importance of mediation and will not push the dispute into court unnecessarily.For more information and for a quotation of the cost, please click here.
Rounded Edge

The Solution
The Solution1. A confidential online platform is opened to provide a private space for some of the key discussions that perhaps may benefit from time for reflection, or where urgent discussions need to take place before a meeting can be arranged. Its also a useful place where the mediator can explain the process, put down the basic background facts and documents for reference as well as a space in which to try to narrow the issues. The discussions can be in private with each part or jointly. In one area the discussions are totally anonymous which can help with the brainstorming of solutions since they can be evaluated objectively without knowing from whom they came (can be from any of the shareholders, their representatives, the company accountant or the mediator). Once agreement has been reached this space can be used to draft the Agreement. These discussion are of course deleted at the end of the process.2. The Mediator will have separate confidential discussions with each of the parties in turn as well as possibly with the company's accountant if so permitted by any of the parties. The purpose is to clarify the facts, and understand what the dispute means to each party as well as identify their individual plans for the future and objectives to achieve in a settlement. 3. The Mediator sets out the law, where it is clear and not open to interpretation, as well as the options each party may have under the law, but will not give legal advice, in the sense that he will not suggest a particular course of action under the law. However he will give his view of the probabilities of each outcome in a court or tribunal action, as well as cost, as part of ensuring all parties understand the best and worst the future may hold in the absence of reaching an agreed settlement. The Mediator will identify the downsides for each of the parties of not reaching agreement, such as the majority shareholder not being able to issue dividends, a useful and commonly used tax saving device, without having to share them with the minority shareholder(s). The Mediator will analyse the more likely outcomes of not reaching agreement. In many internal company disputes, neither party has an option to issue court proceedings and failure to reach an agreement leads to stalemate inn the company. Company stalemate usually leads to all parties suffering since no-one can gain if the company underperfoms.4. Having set the scene and ensured, as best he can, that there is a common understanding of the situation and potential options for each party and the likely outcomes of each option, the Mediator willl then help the parties to begin to brainstorm potential solutions which might benefit everybody in the long term. 5. It is often helpful to seek a valuation of the shares, so that if one party is to buy the other's shares, there is an undertanding of the amount involved. There may already be a Shareholders Agreement in place to regulate how the shares are to be valued. Often the company's accountant can provide this valuation although, in cases in which the accountant may be closer to one party than the other (perhaps was that party's accountant in other matters) then another accountant can be brought in to undertake the valuation. 6. Having obtained as near a common understanding of all relevant matters, laws, options and potential outcomes as well as the damage in not reaching agreement and ensured everybody is motivated to reach a solution, the Mediator will then convene a meeting of several hours held on, preferably, one day. In some cases the meeting may not be absolutely necessary and agreement may be reached by online discussion and telephone. The meeting, or final online and telephone discussions, will be focused at reaching an agreed and detailed solution package. The Mediator will have a series of separate private discussions with each pary and their representatives and also meetings jointly with all parties.7. Once agreement has been reached, the Mediator will draw up a document to evidence the Agreement as well as associated documents to put it into effect,such as, where appropriate, share transfer forms and letters of resignation from the Board and also from employment. In many cases,it may also include drawing up a Shareholders Agreement, to reduce the risk of disputes in the future between the remaining and future shareholders.8. If no final agreement has been reached on the day of the meeting, the Mediator can still continue discussions using the online platform until final resolution on all issues is achieved.
Rounded Edge

Why It Works
Why It WorksIn short, boardroom mediation works because once the boardroom mediator has explained how it will provide by far the better outcomes for all parties than either litigation or doing nothing, and better than the negative outcomes that otherwise would result, all parties then want it to work. The problem for shareholders and directors is that they often do not, at first, see those benefits. It is the role of the boardroom mediator to make these benefits clear at the outset. For example, those who hold the majority of voting shares may think that they are in control and do not need to make any changes to satisfy the dissatisfaction of the other shareholder(s). However, if they have dismissed a minority shareholder director and want him to take no part in the running of the company, they may not have addressed the point that, until they come to a solution that, say, involves them buying out the minority shareholder, they will either have to share dividends with them in the future proportionate to their shareholding (so the minority shareholder earns money despite doing no work) or deny themselves the significant tax benefits to themselves from issuing dividends. Over time this can accumulate to a considerable 'price' to pay for not resolving the future of the company. If the shares are equally balanced and there is a stalemate, one or other of the shareholders may be understandably reluctant to exploit potential sales opportunities and/or new ventures for the company on which the future prosperity of the company might depend. They may prefer to begin to prepare for a split and to set up a separate business. Sometimes the relationship have deteriorated so badly that the directors do not speak to each other. This atmosphere can be picked up by staff who begin to consider their options elsewhere. Nobody gains from such a stalemate as not only does the business from which the owners earn an income produce less profit, but it can only reduce the eventual value of the shares of the shareholder who subsequently agrees to sell to the other as part of a settlement. As with most disputes, misunderstandings by either party, of the facts, intentions or the law ,often fuel their continuation. A business mediator will firstly try to identify such and ensure all parties no longer have any misunderstandings. It may be that it is the case that one shareholder misunderstands why something was said or done and has lost trust, but not explained such to the other shareholder(s). It may be that a majority shareholder is making decisions unware that, because they benefit him personally but damage those of the minority shareholders, whilst not, at the same time bringing any benefit to the company, that, in so doing, he is risking a minority shareholder action being taken against him. Directors may not be aware that their actions, such as paying significant sums to a supplier company he owns separate from the minority shareholders,under invoices based on rates for the supplies much in excess of available competing suppliers, may be a breach of their duties under the Companies House 2006 to not take steps prejudicial to the company. The longer such breaches of the law continue the greater may become the damages which other shareholders may be able to subsequently claim in the absence of any negotiated settlement. In summary, boardroom mediation works because boardroom mediators ensure, through the clearing up of misunderstandings and the provision and sharing of information, that all parties want it to work. Once this stage has been reached he can then move on to help the parties to brainstorm potential solutions.
image of mediation settlement.JPG

Shareholders Agreements
Shareholders AgreementsBy far the best way to avoid disputes and stalemate situations in private companies is for all the shareholders to enter into a Shareholders Agreement.This is essentially a contract in which you all set out, in much more flexible way and in much more detail than in the standard Articles of Association, the relationships and procedures within the company and, importantly, the rule book you want to submit to in relation to a number of issues that can arise in the future. The more situations you anticipate and for which you set out clear guidance and rules as to how to deal with them, the less likely it is that a dispute will arise in the first place. If a dispute does arise, the Shareholders Agreement should set out the manner in which it can be quickly resolved. In this way you can more easily focus more of your time on making the business work than arguing amongst yourselves to the possible detriment of the company.Whilst a small number of the issues may be covered in the standard Articles of Association, the Shareholders Agreement is much more flexible. Unlike the Articles of Association, it is private and cannot be read by the public (available online from Companies House website) and can be more easily and speedily amended as your business objectives change in time. Importantly for the protection of each individual shareholder, it requires the agreement of all shareholders before being changed. A well drawn up Shareholder Agreement may also have the advantage of making the company more attractive to investors.There is no limit to the issues that you can include in a Shareholders Agreement but they can include:-* A shareholder wishing to sell up and leave the company (what happens to the shares, who can buy, a system for valuation, restrictions on future shareholder activity).* A 'tag along' provision to enable a minority shareholder to require someone buying the majority shares to buy his shares and a 'drag along' provision forcing a minority shareholder to sell his shares to the buyer of the majority.* Death or incapacity of a shareholder* Relationships between different classes of shares to be issued in the future with varying rights over dividends and voting rights eg for employees* Ownership of Intellectual Property Rights* Agreement on the extent of the business activities - what happens when targets achieved etc* Policy on issuing dividends* Specific protective rules for minority shareholders* Exit strategy* Specific arrrangements for meetings and business planning, information to shareholders (eg investors) not sitting on the Board * Identifying certain Resolutions that you may wish will require higher voting levels to be passed eg 75% or 100% * Specific rules for handling disputes so they are not left to fester or drag you all into the courtsFor a bespoke Shareholders Agreement tailored fully to your requirements we charge £750. However, we have now made available a form of Shareholders Agreement that you can produce on a DIY basis but with assistance from ourselves in selecting clauses from our library of template clauses. The charge for this service is only £85.00.When you buy our Assisted DIY version, you will be able to access a 34 point questionnaire that will help you inform us of which clauses will be most appropriate for your own Shareholders Agreement. Each question explains the nature of the relevant clauses to enable you to make an informed decision. Once you have fully completed your responses on the form, we will then send you the final version of the document for you to have signed and retain.You should complete the questionnaire in discussion with your co-shareholders to enable you to decide on the precise content. Please note that this Agreement is for companies registered in England and Wales only.You can part complete and save your responses to complete at a later date after fullest discussion. After completion you can contact us for further assistance.For more information on the Assisted DIY Shareholders Agreement, click here.
Rounded Edge

Buy a DIY Assisted Shareholders Agreement - £85.00 plus VAT

Buy a Fully Bespoke Shareholders Agreement - £750 plus VAT

SADIY

Shareholders Agreements - Assisted DIY

By far the best way to avoid disputes and stalemate situations in private companies is for all the shareholders to enter into a Shareholders Agreement. However to have one drawn up for you by solicitors can cost over £2,000 in fees. For this reason most companies do not have one, thus increasing the chances of costly conflict, damaging both to the company and the shareholders pockets, further down the line.We have now made available a form of Shareholders Agreement that you can produce on a DIY basis but with assistance from ourselves in selecting clauses from our library of template clauses. The charge for this service is only £85.00.A Shareholders Agreement is essentially a contract in which you all set out, in much more flexible way and in much more detail than in the standard Articles of Association, the relationships and procedures within the company and, importantly, the rule book you want to submit to in relation to a number of issues that can arise in the future. The more situations you anticipate and for which you set out clear guidance and rules as to how to deal with them, the less likely it is that a dispute will arise in the first place. If a dispute does arise, the Shareholders Agreement should set out the manner in which it can be quickly resolved. In this way you can more easily focus more of your time on making the business work than arguing amongst yourselves to the possible detriment of the company.Whilst a small number of the issues may be covered in the standard Articles of Association, the Shareholders Agreement is much more flexible. Unlike the Articles of Association, it is private and cannot be read by the public (available online from Companies House website) and can be more easily and speedily amended as your business objectives change in time. Importantly for the protection of each individual shareholder, it requires the agreement of all shareholders before being changed. A well drawn up Shareholder Agreement may also have the advantage of making the company more attractive to investors.There is no limit to the issues that you can include in a Shareholders Agreement but they can include:-* A shareholder wishing to sell up and leave the company (what happens to the shares, who can buy, a system for valuation, restrictions on future shareholder activity).* A 'tag along' provision to enable a minority shareholder to require someone buying the majority shares to buy his shares and a 'drag along' provision forcing a minority shareholder to sell his shares to the buyer of the majority.* Death or incapacity of a shareholder* Relationships between different classes of shares to be issued in the future with varying rights over dividends and voting rights eg for employees* Ownership of Intellectual Property Rights* Agreement on the extent of the business activities - what happens when targets achieved etc* Policy on issuing dividends* Specific protective rules for minority shareholders* Exit strategy* Identifying certain Resolutions that you may wish will require higher voting levels to be passed eg 75% or 100% * Specific rules for handling disputes so they are not left to fester or drag you all into the courtsWhen you buy our Assisted DIY version, you will be able to access a 34 point questionnaire that will help you inform us of which clauses will be most appropriate for your own Shareholders Agreement. Each question explains the nature of the relevant clauses to enable you to make an informed decision. Once you have fully completed your responses on the form, we will then send you the final version of the document for you to have signed and retain.You should complete the questionnaire in discussion with your co-shareholders to enable you to decide on the precise content. Please note that this Agreement is for companies registered in England and Wales only.You can part complete and save your responses to complete at a later date after fullest discussion. After completion you can contact us for further assistance
UpBtn About Us
Boardroom Resolve is a specialised service of Graham Ross, a retired solicitor now in practice as a commercial mediator. Graham has over 30 years experience in the law, qualifying as a commercial mediator in 2004 (accredited by the ADR Group)is the author of legal applications software (including the original version of the QUILL solicitor's accounts and time recording package) and was the founder of LAWTEL, the popular web-based legal information update service.Graham is a member of the United Nations Expert Panel on Online Dispute Resolution (ODR) and a Fellow of the National Centre for Technology and Dispute Resolution at the University of Massachusetts. Graham speaks regularly at international conferences on the impact of the law on the Internet and e-commerce and on technology in the judiciary and Alternative Dispute Resolution. Graham was host of the 5th International Conference on Online Dispute Resolution held in Liverpool, UK, in 2007 in collaboration with the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) . Graham was a member of the Working Party of the European Committee on Standardisation (CEN) which developid a taxonomy for Online Dispute Resolution and currently is a team member of the EMCOD project (www.emcod.net) which is creating a facility for the European Union for the measurement of justice through ODR . Graham is also a leading trainer in Online Dispute Resolution having created the accredited distance training course in ODR provided by TheMediationRoom to mediators in over 15 countries.

Graham Ross

Contact

Contact Us

47 Rodney St

Liverpool L1 9EW

Tel: +44 (0) 8450 573943

Fax: +44 (0) 870 1303337

Mobile: 07885 728801

Email: g.ross_themediationroom.com

Master Page 1