MINORITY SHAREHOLDERS AGREEMENT

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What is included

 

The marginalisation of one shareholder or group of shareholders is called ‘shareholder oppression’. The shareholder oppression claims heard in Australian courts are in situations where a minority shareholder (or shareholders) are being unfairly treated by a larger (and usually a majority) shareholder.

The oppressive conduct provisions of the Corporations Act are commonly used in conjunction with a claim of breach of director’s duty or in bringing an application to wind up the company entirely. Situations in which shareholder oppression occurs may be avoided by using a minority shareholder agreement, particularly in situations where the minority shareholders are making a significant financial contribution to the company.

Minority Shareholder Agreement

Contents

  • 1         DEFINITIONS & INTERPRETATION
  • 1.1      Definitions
  • 1.2      Interpretation
  • 2          APPOINTMENT OF NOMINEE DIRECTORS
  • 3          MAXIMUM NUMBER OF DIRECTORS
  • 4          POWER OF MAJORITY SHAREHOLDERS
  • 4.2      Working Capital
  • 5         PUT OPTION
  • 5.2      Determination of price
  • 5.3      Sale of shares
  • 5.4      Indemnity
  • 5.5      Consent
  • 6         GENERAL PROVISIONS
  • 6.2      Counterparts
  • 6.3      Force majeure
  • 6.4      Further assurance
  • 6.5      Governing law and jurisdiction
  • 6.6      Notices
  • 6.7      Service of notices
  • 6.8      Severability
  • 6.9      Survival  & merger
  • 6.10    Variation
  • 6.11    Waiver
  • 6.12    Warranties and representations
  • 6.13    Whole agreement
  • SCHEDULE 1
  • EXECUTION

Fully formatted precedent in Microsoft word, ready to download edit and use.

11 Pages long.

 

 

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MINORITY SHAREHOLDER AGREEMENT
What is it?

A minority shareholders agreement is a legal document designed to protect the rights and interests of minority shareholders in a company. Minority shareholders are those who own less than 50% of the company’s shares and, as a result, do not have controlling power over the company’s decisions. This agreement provides mechanisms to ensure that minority shareholders have a say in significant company decisions and are protected against unfair practices by the majority shareholders.

Key Elements

Key Elements of a Minority Shareholders Agreement

  1. Parties Involved:

  2. Purpose:

  3. Voting Rights and Procedures

  4. Board Representation

  5. Information Rights

  6. Transfer of Shares:   

  7. Dividend Policy

  8. Preemptive Rights

  9. Exit Strategy

  10. Dispute Resolution: .

  11. Confidentiality and Non-Compete Clauses: Amendments

  12. Governing Law

  13. Signatures and Execution

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