Shareholder agreements are important documents and must be carefully crafted. Clients will often ask for a “simple” shareholders` agreement (although it may not exist) and they may first object to the costs of a comprehensive and correct agreement. It may be helpful to ask them if they have considered the following issues, which are known to employ lawyers: Note that the BCA provides that certain provisions governing the management of a company`s affairs must be incorporated into the company`s articles of association if they are supposed to be effective. Article 172 (quorum requirements at a general meeting) is an example of this; § 125 (determination of qualification for management shares); § 140, paragraph 1 (telephone meetings of the Board of Directors); and Article 77 (right of withdrawal or purchase of shares of the company). We will buy your shares for this amount. One of the objectives of this counter-offer option is to ensure that those who try to buy the other party offer a fair price or even a premium). Such a mechanism will result in the separation of enemy shareholders and compensation from the outgoing shareholder. To the extent possible, the resolution mechanism should require the recalcitrant shareholder to do as little as possible to make it work. Online corporate law material and a comprehensive case law agreement are also available at the British Columbia Company Law Practice Manual (Looseleaf, The Continuing Legal Education Society of BC). A shareholders` agreement can be an effective way to define the details of the company`s activity. In terms of correct wording, a shareholders` agreement can give shareholders clarity on issues such as the roles each will play in business, the distribution of profits and costs, dispute resolution, and the inheritance rights of a deceased shareholder and remaining shareholders in the event of death or obstruction. Normally, with the shareholders, the company is a party to a shareholders` agreement, which usually contains provisions that impose obligations between each shareholder and the company, as well as between the shareholders themselves.
Prohibitions of confidentiality and competition, obligations of the share buyback company in the event of the death or obstruction of a shareholder, etc. If the shares of an operating company are held by other holding companies, you may want to consider adding the contracting entities of the holding companies as parties to the shareholders` agreement. This CLE webinar will accompany the Deal Counsel in the design of shareholder agreements that will accompany private equity operations . . . .