Shareholders Agreement Checklist South Africa


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A shareholders` pact is used to regulate relations between the different parties as shareholders and often also in their positions as managers of a company. Our team ensures that your shareholders` pact is tailored to your company`s needs and protects your investments and personal interests in an adequate way. Our audits will identify gaps in compliance and modern governance agreements and ensure that decision-making responsibility is effectively distributed within your board of directors, business owners, shareholders and investors. The MOI is the top ranking of the two documents. However, it is a public document, so some of the issues that shareholders want to govern more confidentially need to be addressed in the shareholders` pact. Any point of the shareholders` pact that is in conflict with the MOI is null and void and not entitled. It is therefore important that both documents be prepared simultaneously. A shareholder pact provides a roadmap for the company`s life cycle from start to finish. It can reduce costs and uncertainties in the event of a “business resolution” or litigation. Each company is different and therefore any shareholder or partner relationship. 10.2. Shareholders expect the company to distribute dividends for each of its fiscal years. 11.2.

Any notification or notification required or admissible for the purposes of this Agreement is valid only if it is written, but it is authorized to communicate it by fax or email. 4.2. The provisions of this Agreement prevaltely in any contradiction between the provisions of this Agreement and the Memorandum or Statutes of the Society. If no evaluation method has been defined in the agreement, it is often impossible to induce two parties to agree on a value at a later stage. This is particularly relevant when an existing party sells to another existing party, since the buyer and seller are on opposite pages. Legal disputes between shareholders with various experts involved in determining value are unfortunately common. This agreement is appropriate for any private company, regardless of its activity. It`s about rights, power, control and security, not your business.

No shares may be issued except through a rights offer proportional to all shareholders on that date. If a shareholder does not respect his rights, he is deemed to have renounced the other shareholders who follow their rights in the same proportions as their rights. Shareholders accept that if a shareholder does not have the financial means to follow his rights, the obligation to issue preferential rights does not constitute unjustified, unjust or unjust conduct. The document also contains provisions relating to the transfer of shares by majority shareholders to several other shareholders who, together, own more than alone. It minimizes the possibility of a takeover by minority shareholders. Some of the aspects that need to be addressed in the shareholders` pact should include: What happens to your shares if you die? Now, could you say they go to your spouse and/or your children, but if the shoe is on the other foot, would you want to be in business with your partner`s spouse and/or children? This issue is all the more important in companies where shareholders are active on a daily basis. We believe it is essential that the shareholders` pact (and the MECs) clearly determine what happens to the shares of a deceased, disabled, outgoing or insolvent shareholder. 8.4. All repayments of the company to shareholders are made in proportion to their respective credit accounts, but to the extent that a shareholder`s loan account exceeds its proportionate share on the basis of its shareholding in the company, that surplus is repaid in the first place.