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Shareholders’ Agreements
Shareholders’ Agreements
Shareholders’ Agreements
Shareholders’ Agreements
Shareholders’ Agreements
Shareholders’ Agreements
Shareholders’ Agreements
Shareholders’ Agreements
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Shareholders’ Agreements

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An introduction to the concepts involved in shareholder agreements and the reasons for their various provisions

An introduction to the concepts involved in shareholder agreements and the reasons for their various provisions

Published in: Economy & Finance, Business
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  • 1. Shareholders’ Agreements Presentation by Dirk Kemp
  • 2. Topics of Discussion
    • Introduction
    • What is a Shareholders’ Agreement
    • Why have a Shareholders’ Agreement
    • Issues commonly covered in a Shareholders’ Agreement
    • How a Shareholders’ Agreement is entered into and maintained – new members; amendments
    • Implementation of Shareholders’ Agreement
  • 3. What is a Shareholders’ Agreement
    • An agreement between
    • the shareholders (or members) of the Company (among themselves) and
    • the Members and their Company itself
    • Governing aspects of their relationship
    • not covered in the Memorandum and Articles of Association
    • to suit the particular requirements of the Company and its Members / Shareholders
  • 4. Why have a Shareholders’ Agreement
    • Why do couples enter into Ante-Nuptial Contracts?
      • To anticipate possible problems and agree how they will be dealt with, if they arise, especially on death / divorce
    • To supplement Articles of Association – easier to amend a Shareholders’ Agreement than the Articles
    • To avoid future disputes among the shareholders by
      • Defining the relationships between them at the outset
      • Anticipating the issues which could cause disputes
      • Agreeing acceptable ways of dealing with them
  • 5. Issues commonly covered in a Shareholders’ Agreement
    • Shareholders, classes of shares and shareholdings
    • Directors – especially nomination by shareholders
    • Management of the Company – who will be responsible for what
    • Funding of the Company
      • Shareholders’ Loans (i.e. Loans by the shareholders to the Co.)
      • Borrowing powers of the Directors (to borrow in the name of the Co.)
    • Transfer of shares
      • Restrictions on sale of shares (or Pre-emptive rights to purchase)
      • Procedures when a shareholder wishes to sell
      • Procedures when an offer is made by a 3 rd party to purchase
      • Valuation of shares
    • Resolutions (i.e. issues) requiring consent of shareholders
  • 6. Essential Elements of any Shareholders Agreement
    • Domicilium and Notices
    • Provision for variation / amendment of the shareholders’ agreement
    • Provision for the Resolution of Disputes
      • Usually arbitration
    • Cancellation of all prior agreements
    • Requirement that all – including new or future – shareholders have to sign the agreement
  • 7. How a Shareholders’ Agreement is entered into & maintained
    • Discussion and negotiation in advance
    • Initial shareholders sign at time of company formation / acquisition
    • Subsequent shareholders sign on transfer or issue of shares to them
    • Agreement reviewed from time to time and as issues arise
    • Amendments agreed, committed to writing and signed - or a fresh amended version signed
  • 8. Implementation or Application of Shareholders’ Agreement
    • In General Meetings of the Company – when resolutions are passed relating to appointment of Directors
    • In Board meetings – when resolutions are adopted relating to:
      • Borrowings
      • Issue of new shares
      • Proposed transfers – arising from offers for sale
      • Dividends
    • When an offer is made by a third party to purchase the Company
    • Other matters covered by the Shareholders’ Agreement

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