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A shareholders agreement is fundamentally important to your business. There are numerous issues that can arise that can give rise to serious disputes between shareholders and more often than not, shareholder disputes can jeopardise the entire business. It is also vital that a shareholders agreement is concluded in conjuction with the Memorandum of Incorporation for the Company, particularly as the Companies Act 2008 provides that in relation to certain vital aspects a Memorandum of Incorporation will override and take precedence over a shareholders agreement.
A share buy back agreement is concluded when the company buys back some of its shares. These agreements require compliance with the company’s Memorandum of Incorporation as well as the Companies Act, 2008. This particular agreement includes a restraint of trade in terms whereof the seller of the shares undertakes to not compete with the Company.
If you are purchasing or selling an interest in a close corporation, then this is the correct document for you. Much like the purchase and sale of shares in a company, these can be complex transactions that are often prone to disputes. A written agreement regulating matters like the purchase price, payment details, confidentiality, dispute resolution, etc is critical.
When appointing a non-executive director – it is strongly recommended that a written contract is put in place. This ensures that the non-executive director’s obligations are outlined, that the termination provisions are clear and that the remuneration is properly documented.
