No Shareholder Agreement In Place

Shareholders are individuals (or companies) who have invested in a company in exchange for shares (equity). Actions can have very different rights, for example, some actions have the right. B voting, some do not have the right to vote, but for voting shares, it is important to ensure that the relationship between shareholders is documented. And if there are two directors and both must vote for the transfer of shares, how can the selling shareholder compel the remaining shareholder`s director to register the share transfer? The assassin clause in the company`s constitution is usually something like: “Administrators may refuse to register a transfer of shares to the company for any reason.” If the relationship is broken, the remaining director may simply refuse to register the shares sold to the third party. I`ve heard them all. You are different, you and your co-shareholders will never fall, will never disagree, so it is normal that you do not need a shareholder pact. As a result, they make the mistake of believing that common sense will apply, and they will be able to solve any problem through discussion and agreement. Mmmm! Sometimes a simple allocation of assets between the two shareholders could solve the problem. For example, if one shareholder wanted to adopt a business strategy and the other did not, the allocation of assets, intellectual property and personnel related to that strategy and the requirement for companies not to compete could solve the problem. Like most relationships, trade partnerships often have their ups and downs, with periods of prosperity and turbulence.

When ongoing disputes cannot be resolved or a partner decides to leave the company, the remaining partners often try to buy the outgoing party`s shares. If there is no shareholder pact and the partners agree to an agreement, the termination of the partnership can normally be done with the help of a qualified business lawyer and a CPA. Another problem that can arise without a shareholder pact is that majority shareholders can issue more shares on themselves and increase their percentage of their share of the exercise at the expense of a minority shareholder. I could tell you that our agreement, by its quality and because it is much cheaper than comparable agreements, offers good value for money. Based on our experience in similar situations, the case probably had consequences that went beyond those described in the judge`s opinion. On the one hand, the dispute has probably destroyed the personal and professional relationships that unite the partners. On the other hand, he spent a huge amount of their time and energy, with high financial costs and emotional costs (stress, anxiety) that cannot be calculated.