Sale And Contribution Agreement

What is really a shareholders agreement?

Shareholders agreement (SHA) because name suggests is really a binding contract by and between shareholders of any company. Besides governing the rights and obligations of an shareholder, this type of agreement, inter-alia, sets-out dividend preference obligation, voting rights, structure in the board, like the manner by which each shareholder sells his stake within the company. It also includes the way shareholders could well be regulated among themselves as well as their relationship inter-se.

When are shareholder agreements executed?

Shareholder agreements are executed by 50 % scenarios. First – between shareholders during inception of an company (signed and executed between founders) and second when receiving external professional investment. The essence of executing a shareholders agreement is usually to provide protection to all or any shareholders, while defining their role like a shareholder. It instils confidence in shareholders likely treated fairly. It also allows shareholders to generate decisions for outsiders who can be future shareholders, thereby provides safeguards for minority positions.

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