This document generally sets out the voting rights of all shareholders and the type of voting required to make a decision. Some decisions require a majority of shareholders or 51%, and others may require a unanimous vote. For example, the shareholders` agreement can only be amended if all shareholders agree to the amendment. The agreement defines the rights and obligations of shareholders, regulates the sale of shares, describes the activity and management of the company and protects shareholders. The objective of the shareholders` agreement is to protect both minority and majority shareholders. For example, shareholders who own less than 50% of the shares have less control over the company. There is no substitute for good corporate governance. Even small businesses with few shareholders are better served by good governance practices. Instead of trying to anticipate any future event or be too prescriptive, a structure that ensures the installation of an experienced board of directors is probably the best approach. What for? Indeed, directors are responsible to the company, not to the shareholders, as is generally believed. If directors conscientiously complete this mandate, many problems can be solved. The critical action is to document the expectations of founders and shareholders before starting to spend money on lawyers in order to develop a USA.

Once expectations are documented, each issue can be discussed and resolved, leading to a set of common expectations that can guide lawyers. Before entering into a shareholders` agreement, a prudent shareholder (or his lawyer) will ask himself many questions, including: what influence do I need to protect my investment? How many financial risks and legal liability can I bear? Do I have to leave the company in the short term? Do you want to be able to buy additional shares or options? Who will run the company? What happens when the manager leaves the company? Won`t regular transfers for tax planning purposes be allowed? Finally, the shareholder agreement also determines the consequences of an end of activity. A successful deal gives every shareholder insight into an exit strategy. When preparing a report, partners should consider what an agreement is for shareholders and a number of key aspects. Shareholders should consider including clauses relating to the issuance of shares, transfer of shares, shareholder protection, dividends and dispute resolution procedures. Which decisions are reserved for shareholders and which decisions are reserved for directors? Some possible decisions are outlined below. These are neither recommendations nor advice on who makes the decisions. Before entering into a shareholders` agreement, it is necessary to think very carefully about the holding of shares.

Who owns how many shares (and for what contribution – cash? Time? intellectual property, etc.) ? And how are these shares held? It`s time to talk to tax professionals about serious personal tax planning. Too many entrepreneurs ignore this important facet of holding shares just to realize that if they “liquidate”, they have a lot of tax headaches. The benefits of using family trusts or issuing shares to spouses and children should be considered. How is holding shares (and then selling) handled by tax authorities? Is it harmful to grant employees stock options rather than giving them shares (with possible exercise modalities)? Please note the related articles to “Structure” and “Share the Cake”. . . .