If a majority shareholder wants to sell its shares but a minority shareholder is not willing to give its consent, it is important to include a provision that requires that shareholder to sell its shares. This is often referred to as the „Drag Along“ provision. This will then allow the majority shareholder to realize his investment at a time and price that he deems reasonable. Of course, the price and other payments for the sale must be fair to all shareholders, including minority shareholders. In the absence of a shareholder contract, a minority shareholder (who owns less than 50% of the shares) generally has little control or control over the management of the company. In fact, control will often fall to one or two shareholders. Businesses are generally majority-managed and although the statutes contain provisions relating to the protection of the minority, these may be amended by a special resolution by holders of 75% of the shares entitled to vote. There are laws that offer limited protection to minority shareholders, but they can be costly and may not get the necessary remedies. The valuation of private shares is often intended to resolve shareholder disputes when shareholders attempt to sell part of their shares for inheritance or many other reasons. Unlike so-common so-sized so-sized public companies, shareholders of private companies must use different methods to determine the value of their shares.
As a general rule, it is implemented by accountants or by an independent audit firm. reimbursement of the purchase price of the company`s shares actually paid by each shareholder; and finally, when assets remain; Dividends are profits distributed to shareholders based on the number of shares they hold in the company. The company must have sufficient distributable profits to distribute dividends to its shareholders. The company`s profits cannot be declared distributable if shareholder loans are pending. It is possible that the content of the shareholders` pact will overlap with other company documents, including the statutes. The articles contain, for example, provisions relating to decision-making and share transfer, and in another article we looked at what investors should pay attention to in a company`s by-laws. The face value (or face value of the shares) is the value chosen by the original shareholders when the company is formed. The face value is determined by the company itself and remains unchanged over time, z.B. a share may have a face value of 1p, 10p, 1 or any other amount in any currency. 2.1. The shareholders mentioned above own the number of common shares and the approximate percentage of the ownership of the company, as shown below: when setting up a business with family or friends, it is easy to assume that nothing can go wrong in the future.
You may assume that if you trust yourself, you do not need to enter into a shareholder pact — you might think that asking for a shareholder pact makes you think you don`t trust or respect your new trading partners.