Company accounts (optional clause)

Company accounts (optional clause)

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This document is a clause which can be inserted into a shareholders’ agreement.

It is common for shareholders’ agreements to incorporate terms which guide how company accounts will be dealt with operationally. This is important as the shareholders have invested capital into the company. They need to be satisfied that the accounts are properly maintained, that there is appropriate record keeping and reporting, and that the shareholders have a right to inspect the accounts.

Using this precedent

This clause can be used in a shareholders’ agreement. Clauses within this precedent can be used to supplement the accounting provisions in the separate precedents “Shareholders’ agreement (short form)” and “Shareholders’ agreement (long form)”.

When inserting this optional clause into an agreement, care must be taken to ensure that the agreement remains consistent. Cross-references, definitions and schedules should all be checked.

This document has been authored for LexisNexis by Elise Margow, Principal, Legally Speaking.

This document is prepared with the assistance of Specialist Editor Stephen Newman, Executive Counsel, Ponte Earle.