A shareholders` agreement is a legal document describing how a company should operate and defining the rights, liabilities and obligations of shareholders. If properly worded, a shareholders` agreement ensures that shareholders are treated fairly and protects them from certain actions that may be taken by other shareholders and outside parties. In addition to changing privileges and protecting shareholders and how the company is managed, shareholder agreements often limit a shareholder`s ability to transfer shares to third parties outside the company. Your agreement may also include the number of shares issued, the fair pricing of the shares, the percentage of ownership of each shareholder, the preferential subscription right for existing shareholders for the purchase of shares, and the terms of payment when the business is sold. Shareholder agreements may include a dispute resolution procedure. For example, the transfer of the issue to an external expert or arbitrator or a so-called buyback method, where one shareholder buys back the shares of another at a price set by the agreement. If a dispute cannot be resolved, shareholder agreements may include deadlock provisions that allow the parties to vote on the liquidation of the company. The terms of shareholder agreements are generally confidential, while the company`s constitutional documents are publicly available at companies House, meaning that any member of the public can view them. The time limits that the restriction may apply must be in accordance with the requirements of the company after the end of the shareholder`s activity. But periods of up to 2 years are not uncommon.
Different restrictions may take different durations. We can tell you what`s right for your business. Like any contractual document, shareholder agreements can be at the center of various disputes and remedies. Disputes relating to joint shareholder agreements include: shareholder agreements protect the rights of minority shareholders. Without an agreement, majority shareholders can make decisions that are not in the interests of minority shareholders. To make changes to shareholder agreements, all shareholders involved must give their consent, but to make changes to the company`s constitutional documents, only a majority of 75% must give their consent. This means that shareholder agreements offer more protection to minority shareholders. They also ensure that certain important issues require all shareholders to agree (e.g. B change of activity of the enterprise). With a sell option, a shareholder or company can force either shareholder to sell shares.
As a call option, this option is usually subject to certain conditions. The key condition here is usually price, with relapse being the fair value determined by an expert. We advise you on the valuation of shares in private companies. These rights give shareholders the right to retain their current percentage of share ownership and avoid dilution. Among the key factors to be taken into account in granting such rights is a minimum ownership threshold, the issuance of securities that do not trigger subscription rights (e.g. .