Businesses must comply with the law. Companies are registered in a specific jurisdiction (for example. B, the state, the province or the country) and must comply with applicable laws, for example. B the Canada Business Corporations Act or the B.C Corporations Act. This legislation sets out the basic rules for corporate governance – what you can do or not, z.B. who can become a director? Can a company issue shares? How can you buy or sell shares? Etc. When setting up a company, it submits a memorandum and a statute (according to the jurisdiction) which are public documents filed with the Registrar of Companies. A shareholders` pact is confidential and its contents are not submitted or made public. Under what circumstances is the contract terminated? (z.B.
bankruptcy, dissolution, unanimous approval) Are there any sanctions? What is an offence? It`s important when owners hire ”Sweat Equity” – what if they don`t perform? If a shareholder is late in payment, what happens (time to correct the defect?), termination and redemption? The shareholders` pact aims to ensure the fair treatment of shareholders and the protection of their rights. A shareholders` pact focuses on the coordination of the shares as well as the conditions and guarantees of these shares. With respect to shareholder agreements through listed companies, an agreement that the corporate government of a listed company or its control unit intends to regulate must provide a valuable overview of the styles of other parties, in accordance with Articles 122 and 123 of the uniform finance law (Dlgs 58/98). It should require an accurate and honest assessment of who will do what and who is committed to doing what. And above all, are the personal goals, goals and tendencies of the founders to take risks compatible? If a founder envisions a small, closely managed business as a possibility of self-reliance and another a dynamic, go-for-it business, that marriage will not work! Even if you`re not sure about certain things and no matter how thorough you are, you`ll miss out on something. Do so and fix it if necessary, i.e. review an agreement later, instead of deferring an agreement at trial. When a company is created, its shareholders can decide on a set of ground rules that go beyond the basic legislation that governs their behaviour.
For example, how do you treat a shareholder who wants to ”out” (and sells his shares)? Should it be possible to ”force” a shareholder (i.e. to buy)? How are differences of opinion managed? Who will sit on the board of directors? Who is the authority to be given to for the various decision-making activities? Can a shareholder (i.e. a founder) be fired? And so on… A ”pump gun” clause is often used to force a buyback.