A shareholders` pact is an agreement between the shareholders of a company. It contains provisions relating to the operation of the company and the relationship between its shareholders. A shareholders` pact is also called a shareholders` pact. It protects both the business unit and the participation of shareholders in the company. – be prohibitive of minority substitution acquisitions; Decisions related to the unanimous authorization obligation generally include the issuance of new shares or bonds, the change in the capital structureStructure of capital refers to the amount of debt and/or equity used by an entity to finance its activities and to finance its assets. The structure of capital, the appointment or removal of directors and changes in major business activities. Despite the advantages of minority shareholders, the requirement for unanimous approval also has drawbacks. It can slow down the decision-making process and reduce efficiency. At the time of the shareholder`s death, his son and son-in-law were co-managers of the trust. The Court found that, although all beneficiaries of the trust were members of the “immediate family” of the deceased shareholder, the shareholder contract prevented the deceased shareholder from bequeathing his trust stock unless the directors and beneficiaries were considered a “direct family.” As a result, the “direct family” exception did not apply in the shareholder contract and the obligation to purchase the remaining group or shareholders was regulated. To avoid the above scenario, shareholders should discuss transfers that would be allowed in the event of a shareholder`s death.
Can a spouse hold the shares if a spouse cannot receive shares? In a family business, are transfers to the next generation allowed and, if so, at what age? Can one of these individuals hold voting shares or should a freeze be put in place to give beneficiaries the exclusive right to hold fixed-value, non-voting shares? Those who can receive shares, whether by transfer or sale, are often not entirely considered. Typical authorized transfers are transfers to holding companies or trusts that are “controlled” by the shareholder. A shareholder who wishes to sell his shares to an acquirer other than a licensed acquirer must generally offer the shares on a pro-rata basis to other shareholders or there is a mandatory repurchase provision. But what will happen to the death of a shareholder? Sometimes death is a “delay event” that triggers the sale clauses, but often it is not even included in the shareholder contract; or the agreement is ambiguously formulated, without taking into account the principles of the law of trust and succession.