Types Of Shareholders Agreement

-October 12, 2021-

Types Of Shareholders Agreement

Mike Burroughs

An advantage for small private companies is that shareholder agreements set out the conditions under which shareholders can withdraw from the business and transfer their interests. Since any transfer of shares can be considered an essential event for closely related entities, it is important to have sufficiently flexible conditions to reconcile the interests of the company with those of each shareholder. Some common transmission conditions are: when a shareholder withdraws, should he be able to "force" other shareholders to buy his shares? If he is expelled, will he be able to keep his shares? If a shareholder receives shares (such as a founder) to take over time certain obligations vis-à-vis the company, certain conditions of exercise must be set. . . .

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