• Shareholders Agreement

Shareholders Agreement

R 850

Contract summary:
There’s no arguing with the fact that becoming a shareholder in a company is a serious investment of both time and money. But how do you know that your investment is properly protected? Can you be sure that all of the shareholders are completely sure about their rights and obligations when it comes to the management of the company, the sale of their shares and all of the other vital transactions that require constant co-operation between shareholders?
A shareholders’ agreement is used to record the terms and conditions on which every shareholder in a company will hold their shares. It ensures that every shareholder is treated fairly and that the affairs of the company are conducted responsibility. Because many shareholders initially invest in an amicable context of mutual trust, many fail to take any responsible measures to protect themselves against future shareholder disputes or abuse of trust, until it is already too late.
Our shareholders’ agreement ensures that this does not happen. It provides a comprehensive range of measures to ensure that the interests of all shareholders are protected. For example, the agreement addresses (amongst a whole range of other issues) the following critical issues:

  • Each shareholder’s right to appoint and/or remove one or more directors of the company;
  • The voting rights of the shareholders;
  • The circumstances and manner in which a shareholder will be entitled, or compelled, to sell their shares;
  • The manner in which any shares in the company will be valued when a shareholder wishes to sell shares;
  • The way in which loan accounts will be dealt with by the company;
  • The way in which meetings of the shareholders and directors will be convened and conducted;
  • The funding and dividend policies of the company;
  • Minority protection and mechanisms for the resolution of disputes or deadlock.
To remain a shareholder in a company without a shareholders’ agreement is a recipe for disaster. Our shareholders’ agreement will ensure that all of the shareholders of the company are properly protected by carefully crafted terms designed to ensure shareholder equity and the responsible and fair management of the company’s business.