Shareholders' agreements prevent sit-|uations where changes in one shareholder's personal circumstances can have a material impact on the company or other shareholders, safeguarding each shareholder's financial interest in the company and the interest of the shareholder's family in the event of a death.
WHEN individuals get together to set up a new company, they very rarely bother to have a shareholders' agreement drafted.
Those of us who are professional advisers see a shareholders' agreement as an incredibly important document and one which a lot of clients, with hindsight, wished they had entered into - but didn't manage to get round to when they should have done.
The purpose of a shareholders' agreement is to set out in a legally binding form exactly how decisions about the company are to be made and to agree how certain events - such as when shareholders wish to sell their shares - are to be dealt with so as not to disadvantage the remaining shareholders.
Shareholders' agreements can save both a friendship and a business.
We have many clients who indicate they do not need a shareholders' agreement on the grounds of cost and because they are going into business with a family member or a friend they have known and trusted for many years.
Any cost savings that are made at the beginning can be well and truly lost with the costs of trying to unravel later problems, which could easily be avoided simply with a method for resolving disputes being included in a shareholders' agreement.
Shareholders' agreements regulate the dealings between shareholders and put in place a framework through which the ongoing relationship between them can be managed.
Where more than one person is to hold shares in a company, even one founded on a long standing friendship or business arrangement, the value of a properly drafted shareholders' agreement cannot be overstated.
By having a properly drafted shareholders' agreement, some of the potential pitfalls can be avoided.
Upon and subject to the consummation of the transactions contemplated in the purchase agreement or, alternatively, the option agreement entered into by Globopar and Telmex on 06/27/04, the parties (together with the special purpose company that will hold a part of their investments in Net, the "SPC") will enter into certain shareholders' agreements
containing provisions relating to transfer of shares, rights of first refusal, governance and other matters typical of such arrangements.
The two parties have signed the Combination and Shareholders' agreements
, in presence of the President of the PRC during his State visit in France and the French prime minister.