An advantage for small private companies is that shareholder agreements set out the conditions under which shareholders can withdraw from the business and transfer their interests. Since any transfer of shares can be considered an essential event for closely related entities, it is important to have sufficiently flexible conditions to reconcile the interests of the company with those of each shareholder. Some transfer terms and conditions are: If you have any questions regarding the shareholders` agreement, contact Hummingbird Lawyers by sending corporate@hummingbirdlaw.com an email to contact a corporate lawyer. Transmission restrictions exist to protect the company and other shareholders from undesirable third parties who may become shareholders or to protect the company when an existing shareholder violates his duty to the company or finds himself in a situation that could seriously damage the company`s reputation. A well-developed shareholders` agreement takes time to understand the business and its objectives, to create tailor-made conditions that meet the needs of the parties. 1.1 This shareholders` agreement aims to regulate the reciprocal rights and obligations of the parties as shareholders of the company, including the individual contributions and responsibilities of the parties. A SHA often grants pre-emptive rights to shareholders, so that if the company does not exercise or only partially exercises its repurchase rights, non-transferring shareholders have the priority right to acquire these shares over their existing shareholding. A SHA should clearly indicate by what detailed mechanism shareholders can exercise their pre-emption rights and how to pay for the shares thus acquired. In the event of a voluntary transfer, non-selling shareholders may have the option of acquiring more than their proportionate shares in shares if one of the other shareholders who do not sell does not exercise their right of pre-emption. However, in the event of an automatic transfer, non-selling shareholders must generally acquire all the “offered” shares. If, for any reason, the non-selling shareholders are not able to fully exercise their pre-emption rights, the company would have to buy back the shares, otherwise those shares could enter unwanted hands. The SHA may specify that, in this case, the payment of shares is made in instalments over a given period. It depends, as described above, on the number of shareholders and their respective holdings..

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