shareholders' agreement


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shareholders' agreement

n. an employment agreement among the shareholders of a small corporation permitting a shareholder to take a management position with the corporation without any claim of conflict of interest or self-dealing against the shareholder/manager. Such agreements are common when there are only three or four shareholders.

References in periodicals archive ?
Having a Shareholders' Agreement setting out how issues which could potentially impact on the business are to be dealt with is not only commercially sensible for the company, but can give comfort to individual shareholders.
A shareholders' agreement can set out provisions governing the management of the company and can include matters on which shareholders' approval is needed.
M2 EQUITYBITES-August 8, 2016-Ecopetrol updates minority shareholders' agreement
Bulgaria's Kozloduy NPP has published on its official website the shareholders' agreement signed with US Westinghouse Electric.
WHEN individuals get together to set up a new company, they very rarely bother to have a shareholders' agreement drafted.
With all the demands on their attention, busy entrepreneurs can easily overlook important long-term planning, such as creating a shareholders' agreement.
Ferrum Crescent said the structure of the transaction will be finalised with the signing of the relevant shareholders' agreement in January 2014 once the first payment of USD1 million will be made.
In these situations, clients frequently turn to the law to provide them with answers, but without a Shareholders' Agreement in place they are living dangerously.
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.
Generally, each jurisdiction has a corporate law, which sets out certain standard procedures and ways in which decisions are taken, such as minority protection right, in the absence of a shareholders' agreement.
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.
In this context, the roles of unanimity, third parties interest and public policy have become very important to control the enforcement of shareholders' agreement (197).