In this context, we have drawn up a list of the main reasons for a shareholder pact. During the growth phase, companies have generally already validated their business model and found product/market ability, but they need a significant financial injection to grow faster and strengthen their position. Shareholders may agree to a general dividend distribution policy so that the shareholder or board of directors can follow suit. The most common corporate policies: people who invest money in a company are also considered shareholders. Because they take risks by investing money, they often require certain provisions to be included in a shareholder contract. These provisions are designed so that investors have their rights and are protected from unexpected situations. Investors may demand certain objectives and take control of the company if those goals are not met. Right to first refusal – this clause protects shareholders and the company from the decision of an outgoing (ex) shareholder to sell his shares to third parties. The clause prevents a company from having an unwanted shareholder who may not have the same objectives for the company. Determine a fair purchase price – you should consult an accountant about it. There are usually two ways to set the price. One option is to determine the price per share in dollars. In this case, all parties should agree with the price and it can be updated/modified each year.
Another option is to create a formula for calculating a price, and that formula would be used when the time comes. A shareholder contract (also known as a “company contract”) is an agreement between all or certain shareholders (or “shareholders”) of a company. This contract defines the rights of shareholders as well as the obligations and powers of the board of directors and management. A shareholder pact is very advantageous if the company is closely managed or if there are few shareholders. A typical shareholder pact can make some or all of the following steps: a dividend is a share of the group`s profit that a shareholder receives at regular intervals during the year. Dividends are paid per share (p.B $0.10 per share) and are used to give shareholders a positive return on holding shares. An entity can pay any percentage of its profits in the form of a dividend, but most pay less than 100%, so that the entity has assets to invest, do business, unforeseen expenses or business losses in subsequent years.