Relationship Agreement Template for England and Wales

A Relationship Agreement sets out the rules and obligations between major shareholders in a UK company, particularly when one shareholder holds significant control. It's commonly used when a parent company lists its subsidiary on the London Stock Exchange while maintaining a controlling stake.

These agreements protect minority shareholders by ensuring fair treatment and preventing the controlling shareholder from misusing their power. The agreement typically covers areas like board appointments, related party transactions, and information rights - all key requirements under the UK Listing Rules. It gives both sides clarity on their rights while helping the company maintain its premium listing status.

Companies need a Relationship Agreement when listing shares on the London Stock Exchange while a major shareholder keeps control. This often happens when parent companies float their subsidiaries but maintain a significant ownership stake - like when a FTSE company spins off a division.

The agreement becomes essential before the listing process begins, as the UK Listing Rules require these safeguards for premium listings. It protects minority shareholders' interests, ensures board independence, and sets clear rules for related party deals. Many companies put these agreements in place during early IPO planning to avoid listing delays and demonstrate good governance.

• Customer Relationship Agreement: Sets terms between businesses and their clients, covering service levels and obligations
• Consensual Relationship Agreement: Used in workplace settings to document and manage romantic relationships between employees
• Relationship Contract For Couples: Defines expectations and commitments in personal relationships outside marriage
• Marriage Financial Agreement: Outlines financial arrangements between married partners
• Pre Marriage Financial Agreement: Establishes financial terms before marriage, similar to a prenuptial agreement

• Parent Companies: Draft and sign Relationship Agreements when floating subsidiaries while maintaining significant control
• Listed Subsidiaries: Engage as the controlled entity, ensuring independent operation despite parent company influence
• Company Secretaries: Oversee compliance with the agreement's terms and maintain corporate governance standards
• Corporate Legal Teams: Draft and negotiate terms that protect both controlling and minority interests
• Minority Shareholders: Benefit from protections against controlling shareholder decisions
• Board Members: Must understand and follow the agreement's rules on independence and decision-making

• Ownership Structure: Map out shareholding percentages and identify controlling interests
• Board Composition: Document current and planned board structure, including independent directors
• Key Rights: List voting rights, board appointment powers, and information access requirements
• Transaction Rules: Define parameters for related party dealings and conflict management
• Governance Framework: Outline compliance with UK Corporate Governance Code requirements
• Template Selection: Use our platform's customizable templates to ensure all mandatory elements are included
• Internal Review: Get sign-off from key stakeholders before finalizing the agreement

• Independence Provisions: Clear terms ensuring subsidiary operates independently from controlling shareholder
• Board Composition Rules: Requirements for independent directors and voting procedures
• Related Party Transactions: Protocols for dealing with connected party business
• Information Rights: Specific details about shareholder access to company information
• Voting Rights: Clear parameters around major decisions and shareholder voting
• Compliance Framework: References to UK Listing Rules and Corporate Governance Code
• Dispute Resolution: Procedures for handling disagreements between parties
• Term and Termination: Duration of agreement and conditions for ending it

A Relationship Agreement differs significantly from a Business Acquisition Agreement, though both deal with corporate relationships. While a Relationship Agreement governs ongoing interactions between a controlling shareholder and a listed company, a Business Acquisition Agreement focuses on the one-time transfer of business ownership.

• Purpose: Relationship Agreements maintain long-term governance standards and protect minority shareholders, while Business Acquisition Agreement structures the purchase and sale of a business
• Duration: Relationship Agreements continue indefinitely throughout the controlling relationship, whereas acquisition agreements typically conclude once the sale completes
• Legal Requirements: Relationship Agreements are mandatory under UK Listing Rules for premium-listed companies with controlling shareholders; acquisition agreements are voluntary commercial contracts
• Key Provisions: Relationship Agreements focus on independence, board composition, and related party transactions; acquisition agreements detail purchase price, assets, and warranties