There are other issues that may be subject to provisions in a shareholder contract. It would not be possible if this article tried to identify them all. Individuals who wish to create a company, or even those who participate in a socially operational company, should consult their lawyer for the adoption of a shareholder contract (and, if there is no existence, constitution). At Harmans, we have checklists that can help identify topics that could be considered to be included in an agreement. At Davenports Law, we are proud to provide real business and legal advice on shareholder agreements, constitutions and general administration of the company. Our sales team is experienced in both private and public practice, so we understand how to give practical advice and cut out jargon. It is amazing how many companies are created and work without having adopted a constitution. These companies run a high level of risk that they are making a sensation because they have not been able to do “What if… To identify and treat cases that may occur. Our team of professional business lawyers will develop your Constitution and dener agreement and will also be able to advise on matters that may arise between shareholders.
Susan and Nancy`s relationship quickly grew – Nancy often failed to convince Susan to sign a “special resolution” necessary for a company to complete a “big deal” (the 1993 Companies Act requires at least 75% of shareholders to approve major transactions). As a result, BEL`s profitability and shareholder working relationship have suffered. Regulation and business management in New Zealand are primarily governed by the 1993 Corporations Act. Some requirements of the Corporate Law are mandatory (for example. (b) the duty of directors to act in good faith in the interests of the company and not to act lightly). Some provisions of the Corporations Act may be tailored to the situation. Changes and additions to the Shareholders Act are made by the adoption of a constitution by shareholders. The statutes are registered with the company`s office and are a public document. A provision often contained in a constitution is the requirement that a shareholder who wishes to sell shares must first offer them to existing shareholders. Otherwise, the shareholder is free to choose his shares. Not all relationships have been established forever, and even the most stable relationship between shareholders can falter. Problems can also arise unexpectedly, such as the death of a shareholder or the need for a shareholder to sell its shares.
Planning ahead for these events can prejudge a dispute and reduce some costs to the parties involved. Dispute resolution provisions would include normal mediation and arbitration clauses, but in circumstances where shareholders simply cannot continue together, a “Russian roulette” or “gun-fire” clause (each party presents a price for the other`s shares and the party with the highest price then buys the other`s shares at that price) ends. It is a quick way to manage a shareholder`s exit in which a dispute cannot be resolved, but it obviously represents certain elements of commercial risk.