Every shareholder wants to maximise the value of their investment, so why not supplement the company’s articles by using this shareholders agreement to prevent conflict and protect minority shareholders. This straightforward shareholder agreement used between some or all of your company shareholders can be the best way to ensure stability and continuity. It covers key issues such as company administration, the company’s officers, new share issues, day to day management, decision-making and leaving shareholders.
Use this shareholders agreement:
when you and other individuals are shareholders in a private limited company
to supplement the company’s articles with provisions relating to shareholders’ powers and entitlements
when all the shareholders want the same rights and entitlements and there is one class of share only
to ensure the additional provisions are kept confidential in a private contract
to to make it easier to change provisions in the future without having to amend the articles
This shareholders agreement covers:
the issue of new shares to incoming shareholders
company officers
requirements for board and shareholders meetings
unanimous shareholder approval for reserved matters of key importance
shareholders’ duties and entitlements
rights of first refusal for shareholders to buy the shares of shareholders leaving the company
shareholders’ rights to information and dividends
shareholders leaving, including restrictions on competing with the company after leaving
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