Our last article dealt with the reason and date of using a shareholders` agreement: the methods used by shareholders to control a company and the advantages of a shareholders` agreement over the use of different classes of shares. Similarly, some shareholders need the right to have their shares repurchased when the founding shareholder(s) withdraw from the company or reduce their stake. The shareholders` agreement may also grant a shareholder or shareholder a veto over certain decisions. Directors run the business. You are responsible to the shareholders. Thus, your agreement can define the role of a director or the limits of his authority. A member can be as active as they want, from a manager to a “sleepy” lender who only provides financing, to active support who offers advice. Your agreement should reflect what happens if a member wants to be more or less active in the day-to-day management of the business. You probably have an idea of what a shareholders` agreement is. But why should you have a shareholders` agreement before spending even one share in a small company? Why pay for a professional to prepare a shareholder contract, if you are a family or very close friends, it makes no sense? Well, that`s the case if you want to give your business the best chance of success. You and a good friend come together to start a business.
You are very close, you may even be a couple or you are married. If all goes well, you never disagree, a total congruence in your business relationship, congratulations. However, if, as is the case with most people, you disagree from time to time, then you need a way to resolve the conflict. They might slightly disagree about the day-to-day operation of the business; or how to manage the company`s strategic intentions and functions. How will you share the company`s actions? What about the transfer of the company`s shares to other people? What is the right you have over your shares as shareholders? Divergent views on funding and many other challenges. First of all, it depends on the problem. You and your co-shareholders or shareholders can solve any problems mentioned in a shareholders` agreement. So, let`s all take a collective sigh of relief – something like (Aaah!). Don`t let yourself be cleared too much. Even if you have a great idea to make a shareholders` agreement, you can still end up disagreeing. Credit or share subscription funds can be offered by business partners or even by competitors. In principle, there is nothing wrong with such an agreement, but existing shareholders should take a very close look at the knowledge and power they might accidentally give to another person.
The nice, laid-back person you`re dealing with today could be replaced next year with someone who isn`t as friendly. Your agreement may contain provisions related to the future trading of a shareholder or the holding of shares or other assets. While shareholders all agree, any idea of a shareholder`s departure is not a priority. In this case, a shareholders` agreement should contain both provisions concerning good and bad graduates. This determines at what price the shares are sold to other shareholders when a shareholder leaves. For example, a good Leaver can be an outgoing shareholder, so he can sell his shares at market value, while a bad Leaver, who is terminated, could be forced to sell the shares either at market value or at the price he paid for them. As far as agreements are concerned, the shareholders of joint ventures can decide precisely what the agreement should be, subject to compliance with ordinary law. .