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Shareholder Agreements

A Shareholders Agreement is a contract between the shareholders of a company. Shareholders Agreements govern the relationship between shareholders in a company. A Shareholders Agreement covers business arrangements, rights, responsibilities, obligations and liabilities of shareholders. A Shareholders Agreement also protects the interests of shareholders regarding their investment in the company. It covers matters that not covered by a company’s constitution. It operates in addition a company’s constitution.

A shareholders agreement includes, among other things, provisions in relation to the terms on which a person can leave (or be required to leave) the company, decision making, management of the company’s business, appointment and removal of directors, meetings and voting rights, distribution of profits, contributions of capital, sharing of expenses and resolution of disputes.

Shareholder Agreements

We have four Shareholder Agreements for you to choose from. Scroll down for a description of each.

Shareholder Agreement – General

A general purpose Shareholder Agreement with drafting notes. Covers most popular topics. 15 pages long.

  • Definitions and interpretation
  • Operation of the business
  • Directors and the board
  • Board meetings
  • Duties of directors
  • General meetings
  • Issue of new shares and dividends
  • Dividends
  • Transfers and restrictions on parties
  • Sale notice and first right of refusal
  • Event of buy back
  • Drag along rights
  • Tag along rights
  • Insurance
  • Loan accounts
  • Confidentiality
  • Contracts, transactions and conflict of interests
  • Commencement and termination
  • Independent legal advice
  • Costs and expenses
  • Amendment
  • Notices
  • Relationship of parties
  • Assignment
  • Waiver or variation of rights
  • Powers, rights and remedies
  • Consents and approvals
  • Further assurance
  • Counterparts
  • Entire agreement and understanding
  • Governing law and jurisdiction
  • Execution page
  • Schedule 1: shareholders and directors

Our most versatile and popular Shareholder Agreement

 

Shareholder Agreement 1

A general Shareholder Agreement that covers includes an Accession Deed for adding new shareholders at a later time. This  Shareholder Agreement contains the following clauses:

  • Definitions
  • Interpretation
  • Structure of the company
  • Objectives of the company
  • Management
  • Agreements between company and shareholders
  • Use of intellectual property
  • Transfers of shareholder’s shares
  • Option to purchase outgoing shareholders shares
  • Power of attorney
  • Publicity and confidentiality
  • Records and accounts
  • Payments and dividends
  • Good faith
  • Dissolution of company
  • Disputes
  • General provisions
  • Execution & schedules
  • Accession Deed

A versatile agreement that can be adapted to suit a wide range of industries.

21 pages long.

 

 

 

Shareholders Agreement 2

A general Shareholder Agreement that covers initial funding, further funding, appointment of directors, relations between shareholders and disposal of shares. It contains a formula for the pricing and sale of shares. A versatile agreement that can be adapted to suit a wide range of industries. This agreement contains the following clauses:

  • Definitions and Interpretation
  • Conditions Precedent
  • Term
  • Objectives
  • Structure of the Company
  • Board of Directors
  • Decision Making
  • Management
  • Financial Reporting
  • Accounts
  • Funding
  • Agreements Between Company and Shareholders
  • Transfer of Shares
  • Procedure on Transfer of Shares
  • Determination of Sale Price
  • Non-Competition
  • Publicity and Confidentiality
  • Dispute Resolution
  • Acknowledgments and Warranties
  • Termination
  • Default
  • Assignment
  • Counterparts
  • Entire Agreement
  • Further Action
  • Choice of Jurisdiction and Law
  • Non-merger
  • Notices
  • Waiver
  • Variation
  • Costs
  • Paramountcy
  • No Partnership or Agency
  • Severability
  • Consent

27 pages long.

 

 

 

Shareholder Agreement 3

A very detailed Shareholders Agreement that allows a shareholder to appoint a director, loans to the company by shareholders, and restricts decision making parameters of executive directors to parameters listed in a schedule to the agreement. Executive directors are required to disclose pre-existing commercial interests and an attached schedule lists issues requiring special majority resolution approval. A very detailed shareholders agreement suitable for large commercial enterprises where there may be one or more large investors who may not have involvement in day to day running of the company. This agreement contemplates many detailed aspects of the running of a company. This agreement contains the following clauses:

  • Conditions Precedent
  • Establishment of the Company and capitalisation
  • Objects of the Company and basic duties of the parties
  • Structure of Company
  • Powers of decision
  • Finance, insurance, records etc
  • Additional obligations, indemnities, and guarantees
  • Share issues
  • Restrictions on transfer of Shares
  • Third party offers
  • Compulsory offer of Shares
  • Confidentiality and announcements
  • Protection of the business
  • Dispute resolution
  • Notices
  • Miscellaneous
  • Definitions and interpretation

29 pages long.

 

 

Shareholders Agreement 4

A standard, general Shareholder Agreement that covers initial, further funding, appointment of directors, relations between shareholders and disposal of shares. Allows a constitution to be adopted by the company and attached to the agreement. The variable in information is contained in a schedule to the agreement, which makes it quick and easy to adapt to a variety of uses. This agreement contains the following clauses:

  • Definitions and Interpretation
  • Establishment of Company
  • Condition Precedent – Agreement to Initial Annual Program
  • Purpose
  • Contributions to Share Capital of the Company
  • Further Financing
  • Guarantees and lndemnities
  • Protection of Business of Company
  • Powers and Responsibilities of Company
  • Functions of the Board
  • Protection of Shareholders
  • Shareholders Not to Interfere
  • Directors
  • Matters Requiring Directors’ Approval
  • Special Resolutions
  • Allotments, Transfers and Encumbrance of Shares
  • Material Breach
  • Rights on Winding Up of Company
  • The Constitution
  • Confidential Information
  • Public Statements
  • Duration
  • Good Faith
  • Time of the Essence
  • No Partnership etc.
  • Mediation
  • Severability
  • Entire Understanding
  • Variation
  • Waiver
  • Further Assurance
  • Costs
  • Notices
  • Governing Law and Jurisdiction

Fully formatted in Microsoft word, ready to download edit and use. 22 pages long.

 

 

 

See also:

 

 

 

Author:  Kalde Legal

 

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