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When setting up a business with family or friends it is easy to assume that nothing can go wrong in the future. You might assume that, as you trust one another, you do not need to put in place something like a shareholders’ agreement to protect against unexpected difficulties.

Hopefully, nothing will go wrong in the future but it is worth bearing in mind that even family members and best friends fall out and, if the worst should happen, you could then end up with nothing, however successful the business.

Or you could find yourself facing not only the breakdown of a friendship but also a costly and acrimonious legal dispute related to the business.

A shareholders’ agreement and shareholder insurance can act as a safeguard should things go wrong by giving you and your fellow shareholders more protection against these types of scenario.

Although most people with a shareholders’ agreement will never need to rely on its terms, there will be many more cases where shareholders wish they had taken the time to put a proper agreement in place.

The agreement’s purpose is to protect the shareholders’ investment in the company, to establish a fair relationship between the shareholders, to provide the funds to purchase the deceased’s shares and to govern how the company is run.

It is a simple, effective cost efficient way of protecting your wealth and stake in your own business should the unthinkable happen – so don’t delay and discuss the solutions today.

Ian Pratt founded and runs North East funding brokers IAP Consultancy, which can access expert advice through its connections. IAP Consultancy is a well-respected commercial finance brokerage business which helps businesses access the funding they need to grow. You can find out more about IAP Consultancy at

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