Shareholders Agreement Restrictions On Share Transfers

As a general rule, shares can be transferred by written agreement and approval of registered shares between shareholders. Statutes may restrict portability (but do not exclude it); authorization requirements can be implemented. Pre-emption rights may also be regulated to allow certain shareholders, usually investors, to purchase the company`s future issues, with certain exceptions and/or as anti-dilution. In the event of a tie, the Chairman could also vote on a second or other vote, which could be acceptable if there are several shareholders, unlike two 50/50 shareholders. When proposed, the conditions for appointing the Chairman should be ensured so that this element of control is not transferred to another shareholder. There are no regulatory restrictions on the portability of actions, except for certain sectors and/or as required by cartel and abuse legislation. Restrictions may also be included in the company`s by-statutes (except in public authorities) and/or in shareholder agreements. The transfer of shares is only made against the company when the company has received a request to register the transfer of the shares, but it can only be created against a third party after the company has entered the transfer of the shares in the share register. In a family business that includes several generations and several pages of the family, an alternative to a shareholder contract is a family charter. In addition, pawned shares cannot be misappropriated by the shareholder without the prior consent of the pledge. A company`s statutes may (and will be) limits to the ability of shareholders to transfer shares.

The statutes must therefore be reviewed when a share transfer is proposed. Articles often contain pre-emption rights that give existing shareholders a first right to acquire the shares of a shareholder who wishes to transfer them in proportion to their existing interest. Therefore, the transfer of shares other than existing shareholders is only possible when an offer has been made at the same price to existing shareholders. There may also be a shareholder pact between shareholders that governs the transfer of shares. The transfer of shares under a deed of name is annotated, unless it is written and signed by the ceding and the purchaser whose signatures are authenticated by at least one witness or otherwise specified in the company`s statutes. A shareholder of a limited liability company, a limited company or a limited-share company cannot sell his shares until he or she is registered.

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