Shareholders’ Agreement Are Essential

Recent Key Judgments Illustrating the Importance of Shareholders’ Agreements

1. Saxon Woods Investments Ltd v Costa [2025] EWCA Civ 708
In this pivotal Court of Appeal case, the court upheld that a shareholder suffered unfair prejudice when the company failed to work in good faith towards an agreed exit deadline outlined in the shareholders’ agreement. The director in control withheld critical information and failed to consider genuine exit opportunities. The judgment clarified that directors’ duties under Section 172 of the Companies Act 2006 require objective honesty, not just subjective belief in acting in the company’s best interests. This case demonstrates why clear obligations regarding exit processes and transparent communication in shareholders’ agreements matter deeply to protect minority shareholders.

2. Aabar Holdings B.V. v. Glencore International A.G. [2024] EWHC
This High Court ruling struck down the so-called “Shareholder Rule” which had previously prevented companies pleading privilege (in this context a kind of secrecy) against the company’s own shareholders. The Court held that company law had evolved so that greater weight needed to be given to the company’s status as a separate legal entity. In other words, a shareholder couldn’t demand to see all the company’s documents just because they were a shareholder. This case emphasises how important it is that a clearly drafted shareholder agreement gives to shareholders full information rights including financial and business information. Well drafted shareholders’ agreements will address these points and thereby avoid ambiguities and disputes about access to company information and ultimately about the ability to influence decisions.

Why You Should Engage Heald Solicitors for Your Shareholders’ Agreement

These cases reveal the tangible consequences of vague, incomplete, or poorly drafted shareholders’ agreements: unfair prejudice claims, breach of directors’ duties, costly litigation, and disputes that can undermine your business.

At Heald Solicitors, based in Milton Keynes but serving clients across England and Wales, our experienced Corporate and Commercial team will:

• Tailor agreements specifically to your business’s profile, shareholder composition, and future ambitions.
• Include vital provisions such as share transfer controls, tag along and drag along rights, dividend policies, and clear exit strategies.
• Protect minority shareholders by embedding dispute resolution mechanisms like mediation and arbitration to avoid costly court battles.
• Draft competition restrictions and confidentiality clauses on directors and former shareholders safeguarding your business assets and sensitive information.
• Provide expert advice on directors’ duties, ensuring compliance with the Companies Act 2006, to prevent conflicts and personal liability.

Protect Your Business and Personal Interests Today

Having a bespoke, well-drafted shareholders’ agreement is indispensable whether you are starting a new venture or managing an existing company. It ensures clarity, fairness, and security for all shareholders, provides a roadmap for managing disputes, and helps avoid damaging litigation.

Do not risk your investment or personal interests with generic or incomplete agreements. Contact Heald Solicitors today on 01908 662277, to safeguard your future with expert legal advice tailored to your unique needs.