Royal Mail to be Floated on Stock Exchange

Royal Mail will be old on the London Stock Exchange. This is what Business Secretary Vince Cable has just confirmed.

In his words, the public will be given the chance to buy shares and employees would receive 10% of shares for free. Because of this sale, business is expected to be valued at £2bn-£3bn.

Members of the Communication Workers Union (CWU) threatened with strikes as they are strongly opposed to the privatisation.

“Now the time has come for government to step back from Royal Mail, allow its management to focus wholeheartedly on growing the business and planning for the future,” Mr Cable said in a statement to the House of Commons.

According to him, the aim of this step was to take care after the Royal Mail’s future. These changes would allow employees get free shares and take a steak in the business. By the way, do you need a shareholders agreement template?

Private operators such as TNT and DHL are pointed out as possible buyers.

Business Minister Michael Fallon said that through private capital Royal Mail will quickly grow.

Royal Mail is adopting its work so that it pays more attention on the delivery of parcels than of letters.

After many years of losses, last year Royal Mail doubled its profits exactly because of a boom in parcel delivery.

Mr. Fallon received a letter from the CWU threatening with strike action in case the government did not think again about the privatisation.

CWU general secretary, Billy Hayes, said: “Nobody outside of government and their potential investors wants their postal service sold. The public consistently oppose the sale and recently 96% of workers voted against.”

The current idea for changes was mooted under the last Labour government.

According to Chuka Umunna MP, Labour’s shadow business secretary said there were still many unresolved issues so the government needn’t hurry that much.


Chief Mitchell unfortunate outburst

Andrew Mitchell has recently apologized in public for police altercation. He was reported to have caused an angry confrontation with the security guards at 10 Downing Street for not opening the front gates and letting him drive off on his bicycle. Mr. Mitchell has already apologized in public and it is said that the police officers have accepted his apology. However, there are still many people who want to see him resign. Mr. Mitchell may wish for things to settle and for people to forget about the incident, however, it will not be that easy given the recent shooting in Manchester where two police men were killed while on duty.

Andrew Mitchell, Tory Chief Whip, is said to have apologized after causing an angry confrontation with a police officer. The incident happened on Downing Street last Wednesday when Mitchell was leaving the premises of 10 Downing Street. Michael wished to cycle through the main gaits, but the police officer did not let him do that. The reason for this was due to the security rules which restrict the guard police to open the front gates often. He swore at the guard police officers because they refused to open the gates for him. Mr. Mitchell was also reported to have called them ‘plebs’.

After this incident, Mr. Mitchell received a lot of criticism and there was also a dressing down from David Cameron himself. Furthermore, there were some people who asked for him to resign his post. Last week, Mr. Mitchell apologized publicly for causing the ugly confrontation. He added that despite the fact that he did not use the words which were attributed to them, he admits that he did not treat the policemen with the respect that they deserve.  It was also announced that the police officers at the gate have accepted his apology and everything was all right.

Even though the incident has been put to rest, there is still pressure from different quarters. Mr. Mitchell pronounced that he would like to ‘draw a line’ and forget the incident ever happened. He claims that some of the words that have been attributed to him have not been actually used. He was, at that time, very modest with what he said. However, many people, including Deputy PM Nick Clegg, have asked him to actually clarify what words he has used and what exactly he said.

The chairmen of Met Police Federation, Mr. John Tully has requested Downing Street to launch an enquiry and make things clear. According to him, the fact that Mr. Mitchell put the officer’s integrity into question is unacceptable. The time of the incident was completely unfortunate for chief Mitchell as only recently two policemen got killed in Manchester while serving their duties. Mr. Mitchell might have apologized in public for causing the ugly incident, but things may not settle as soon as he hopes.

At The Legal Stop we cannot guarantee your employees and partners will always behave appropriate , however we can provide you with the highest quality legal documents, such as employment documents, agreements and policies.

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Shareholders’ Agreements

A shareholders’ agreement is a legally binding contract between the shareholders of a company; it regulates the relationship between the shareholders in order to protect the interests of the individual shareholders as and against each other. A shareholder agreement is an essential document for any company to have especially if there is more than one shareholder. It provides protection for the shareholders and establishes a fair relationship between them. Generally a shareholder agreement sets out the rights and obligations of the shareholders, regulates the sale of shares in the company, details how the company is going to be run and how decisions are to be made.

Here are some uses of shareholders’ agreements:

  • To give to a shareholder rights which would otherwise be unenforceable if inserted in the company’s Articles e.g. personal rights such as a right to be appointed as a professional adviser to the company.
  • To regulate the relationships between shareholders which have nothing to do with the administration of the company, e.g. if one or more shareholders are investing in the company.
  • To protect minority shareholders’ rights e.g. by giving them a power of veto which they would not otherwise enjoy under Company Law.
  • To preserve confidentiality. Articles of Association are open to public inspection, thus it may be more appropriate in some circumstances to deal with matters in a shareholders’ agreement for reasons of confidentiality.
  • To provide a way to transfer shares in the business and help run the business smoothly in the face of future events such as death, disability or retirement of a shareholder. Shareholders’ agreements generally establish a purchaser for the shares of the deceased or existing shareholder, a formula for determining the purchase price of the shares, and a method for funding the purchase.

In the absence of a shareholders’ Agreement any disputes between shareholders will have to be settled by what is contained within the Articles of Association, however the Articles generally do not offer shareholders full protection.

The Articles of Association of a company are the rules governing its internal management and administration. The Articles are governed by Company Law and are binding on all the members of the company. A shareholders’ agreement is an agreement between the members of a private limited company which is governed by the normal law of contract. Some matters covered in a shareholders’ agreement may equally be incorporated in the Articles of Association for example pre-emption rights. However, bearing in mind that the Articles of Association are open to public inspection, it may be more appropriate in some circumstances to deal with matters in a shareholders’ agreement for reasons of confidentiality. Furthermore, shareholders’ agreements are often used to give protection to shareholders because they provide for what happens if ‘things go wrong’, if there is a falling out between the shareholders. Also, a shareholders’ agreement contains detailed provisions to cover specific issues and it gives a contractual remedy if its terms are broken.

There are also some drawbacks with shareholder’s agreements. There may be complications when a member who is signatory to a shareholders’ agreement transfers shares since the new member must agree to be bound by the shareholders’ agreement and the old member released from it. Also Shareholders’ agreements can become unwieldy if the number of shareholders increases substantially.

Clauses commonly included in shareholders’ agreements are:

Provisions covering initial funding and further financing of the company. Warranties and indemnities from existing shareholders to a new shareholder/investor. The appointment of auditors and bankers. Provisions governing the application of funds invested. Provisions governing any personal guarantees given by a shareholder to third parties dealing with the company. Dividend policies. Rights of first refusal in the event of a shareholder wishing to transfer his or her shares (pre-emption rights). Compulsory transfer or option arrangements. Covenants not to compete with the company nor to solicit its customers, suppliers, officers or employees. Undertakings of confidentiality. Provisions for protection of minority shareholders (e.g. rights of veto). Mechanisms for dealing with deadlock.

Please note that this list is not an exhaustive. Shareholders’ agreements can take a variety of forms and can serve a variety of purposes, they can range from the extremely simple to the extremely complicated.

We have a large number of documents including shareholders’ agreements.

Our shareholders agreements are fully comprehensive and contain detailed and practical clauses, including clauses dealing with:

  • transfer of shares in the company,
  • pre-emption rights on a transfer of shares,
  • deadlock which determines how disagreements on key issues are to be resolved,
  • drag-along enabling a majority shareholder to force a minority shareholder to join in the sale of a company,
  • tag-along protecting the interests of minority shareholders where the majority shareholder is selling out, thus allowing the minority shareholders to jump on the back of the buy-out,
  • confidentiality, non-compete, non-solicitation and non-poaching to safeguard the interests of the company.

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 All business relationships start out with good intentions, however, they all have the capacity to go horribly wrong. Disputes can arise between shareholders for many reasons and shareholder agreements are supposed to take account of such eventualities.

We strongly recommend that all companies with more than one shareholder enter into a shareholders’ agreement since it provides a piece of mind and lets everyone know where they stand so to avoid costly disputes in the event of a falling out between shareholders. Also, venture capitalists usually require a shareholders’ agreement as a condition of funding.