The Women Entrepreneurs Network
It was an honour to be invited to speak amongst a panel of speakers at the Women Entrepreneurs Network’s Circle Event on legal issues that keep one awake at night.
One of the issues can be shareholders. Shareholders can be a nightmare if it is not properly dealt with, particularly where there is no written agreement.
Imagine this, you and two other shareholders set up a company that sells health products. The two other shareholders invested in the business with monies whilst you contributed your skills and knowledge. The company was doing well for a year or so until one day you read in the news that the products that your company sold were infected and sales dropped to their all-time low. One of the shareholders demanded to dissolve the company and refused to finance the company any further. At the same time, this shareholder is also one of the two directors and refuses to sign any documents at all. What will happen to the company? This may be a break or make depending on whether there is further injection of funds into the company. if there is a shareholders’ agreement, it would have provisions that would cater to this particular situation and would have had regulations in place so that the company will be managed well into the long term.
