Side Letter Agreement PLC: All You Need to Know
When two parties enter into a business agreement, it is not uncommon for them to make certain amendments or modifications to the original contract. In such cases, they may sign a side letter agreement, also known as a side letter, which outlines the additional terms and conditions that are not included in the original agreement.
A side letter agreement is a legally binding document that supplements the main agreement. It is often used in situations where the parties want to add specific provisions to the original agreement without having to renegotiate the entire deal. This can include anything from modifying payment terms to clarifying certain obligations or responsibilities.
One type of side letter agreement that is commonly used by businesses is the side letter agreement PLC. A PLC, or public limited company, is a type of business structure that is commonly used in the United Kingdom and other countries. It is a type of limited liability company that is publicly traded on a stock exchange.
A side letter agreement PLC is a legally binding document that is entered into between a public limited company and one or more of its shareholders. It is used to supplement the company`s articles of association, which is a legal document that governs the company`s internal management and affairs.
The purpose of a side letter agreement PLC is to provide additional assurances or protections to a shareholder that are not included in the articles of association. This can include anything from providing a shareholder with additional voting rights to establishing certain restrictions on how the company can operate.
For example, a side letter agreement PLC may be used to grant a minority shareholder the right to veto certain strategic decisions made by the company`s board of directors. This can help to protect the shareholder`s investment and ensure that their interests are taken into account in important business decisions.
In order for a side letter agreement PLC to be legally binding, it must be signed by both parties and comply with the company`s articles of association. It must also be filed with the Companies House, which is a government agency responsible for maintaining corporate records in the UK.
Overall, a side letter agreement PLC is a useful tool for public limited companies and their shareholders. By providing additional assurances and protections, it can help to strengthen the relationship between the company and its investors and ensure that everyone`s interests are taken into account. If you are considering entering into a side letter agreement PLC, it is important to seek legal advice to make sure that the agreement is in compliance with all relevant laws and regulations.