Shareholders Agreement Subsidiaries

Shareholders Agreement Subsidiaries

The law also grants shareholders certain remedies, often with an action for damages for breach or other remedies. Under Section 212 of the Act, the High Court has broad powers to resolve shareholder disputes where the Tribunal considers that the affairs of the corporation are conducted or that the powers of the directors of the corporation are exercised in a manner that oppresses a shareholder or does not respect the interests of a shareholder as a member of the corporation. Under Section 212, the High Court may issue an injunction, as it deems appropriate, including by prohibiting or prohibiting any act or cancellation or modification of a transaction, or to regulate the conduct of the company`s affairs in the future or for the purchase of a shareholder`s shares. In cases such as this, the High Court will often order a shareholder to buy the shares of another shareholder and resurrect the repurchase of the shares of one or more shareholders. In addition, a disgruntled shareholder may also apply for a contract under Section 569 of the Company`s Liquidation Act. Again, the High Court may issue such an injunction if it believes that it is fair and fair. Most shareholder agreements determine the transactions it performs or plans to carry out and contain provisions that determine the circumstances under which the entity may change the nature, nature or location of its activities. In addition, most shareholder agreements provide that the company`s activities are controlled by its board of directors. This confirms Section 158 of the Act, which is one of the most important provisions of the Constitution. Its effect is to confer on the board of directors of a company all the powers of the company that are not expressly reserved by the Constitution or the law to the shareholders at a general meeting. The result is a wide range of executive functions within the Board of Directors. After an agreement is reached, it is a good idea to ask a few key questions to ensure that the agreement will actually be useful.

Ask yourself: in private companies, it is customary to impose an obligation on a shareholder who wishes to sell his shares to allow some or all co-shareholders to buy them. These are also called «pre-emption rights» and are usually found in the Constitution for reasons that I will detail later. I hope that the above discussions will give you a better understanding of the purpose and nature of shareholder agreements and the issues that arise most often in relation to shareholder agreements. It goes without saying that there would be specific considerations regarding certain types of shareholder agreements, such as a joint venture or venture capital investment, which are outside the scope of this document. I would also like to say that I think it is wise to enter into a shareholders` pact which also envisages the inclusion of appropriate service agreements with important members of the management team as long as they are not yet in place.

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