In addition, as noted above, different shareholders may wish for different provisions depending on the share of the company they own. For example, minority shareholders may be more interested in provisions protecting them from the marginalization of decisions, and majority shareholders may be more interested in provisions to ensure that they are not “extorted” by the minority. The shareholders` pact should contain a list of defaults and consequences of a default by a shareholder, including whether that shareholder is compelled to transfer his shares and, if so, whether the market value or “fire sale” would be assessed. While there is no law that requires you and your company to make a shareholder pact, it will often help protect your company and its shareholders. It is important that all parties understand their rights and obligations from the outset. Although the company`s statutes (statuses and statutes) can serve as a basis, a shareholder contract gives more certainty that all are on the same side and helps to stifle problems in the bud, which generally saves time and money in the long run. For further questions, please contact Allied Legal at firstname.lastname@example.org or by phone on 03 8638 0888. Our Melbourne-based law firm`s commercial lawyers regularly advise and establish shareholder agreements on behalf of clients. For investors, exiting the company at a price at which they realize value for their investment is of particular importance. A drag-long plan applies where, in particular, majority shareholders wish to sell their shares to third parties, but one-third is willing to acquire only 100% of the company`s shares.
Under these conditions, selling shareholders may “train” minority shareholders or force them to sell their shares to that third party under the same conditions. This ensures that the majority will not remain without an exit route. If the other shareholders do not accept this offer, the shareholders` pact should also include the obligation for the beneficiary of these shares to take out a “loyalty obligation”, the beneficiary agreeing to be bound by the terms of the shareholders` pact. This comforts the other parties to the shareholders` pact in that each new party must act in accordance with the provisions of the existing shareholders` pact. Over time, the personal circumstances of each shareholder can change significantly. This can have a huge impact on the transaction in the absence of a shareholders` pact.