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Minority Shareholder Agreement

Minority Shareholder Agreement

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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