A successful shareholder pact examines the legal obligations that each contracting party must meet. Basically, the agreement is on how business will be structured, and that is the basis on which business will grow. You must state in writing what the legal obligations of anyone who signed the original agreement are. While it is not possible to fully exempt the group from future litigation, a well-written shareholder contract can be used to settle shareholder disputes under the law. Businesses must comply with the law. Companies are registered in a specific jurisdiction (for example. B, the state, the province or the country) and must comply with applicable laws, for example. B the Canada Business Corporations Act or the B.C Corporations Act. This legislation sets out the basic rules for corporate governance – what you can do or not, z.B. who can become a director? Can a company issue shares? How can you buy or sell shares? Etc. When setting up a company, it submits a memorandum and a statute (according to the jurisdiction) which are public documents filed with the Registrar of Companies.

A shareholders` pact is confidential and its contents are not submitted or made public. 1.2 Between the contracting parties, the shareholder contract takes precedence over the law, the company`s statutes, the possible internal regulations of the board of directors, possible management instructions and other prior agreements between the parties concerning the matters governed by the shareholder contract. As the business develops, it may be necessary to make decisions regarding the acquisition of new land, the purchase of real estate or the repayment of a loan loaned on behalf of the company. The shareholder contract provides the protection you need against the decisions of a few members of the company. While it may seem tedious to sketch out any situation the company may find itself in, the clearer the shareholder contract, the easier it will be to make decisions. The parties mentioned above, referred to as “parties” and individually “parties,” have the following shareholder contract (the “shareholders` pact”) relating to the ownership of the parties to COMPANY NAME, the number of VAT NUMBER, a company registered in accordance with COUNTRY laws (hereafter referred to as “companies”). 17.1 The company`s shareholder register must indicate that the parties have entered into this shareholders` agreement. This section should also indicate that shareholders ensure that a business plan (i.e.

budget) is established and updated, approved and in effect at any time. Establish rules about what happens when a particular shareholder fails to meet its obligations to the company. What happens when a shareholder dies? There should be a fair way for surviving shareholders to acquire shares (optional or mandatory) of the deceased shareholder`s estate. The company should have life insurance to finance such buybacks. It is a good idea to have a tax accounting consultant who is competent in this area as well. How can we focus on equities? Options: external valuation experts (expensive and unpredictable) or shareholders to agree on a value and attach it to the agreement as a timetable (which is regularly updated) or to use a formula (several profits or sales, book value, etc.) or a combination of the book value mentioned above.