Shareholder Agreement defines the relationship between a particular company and its shareholders. It also describes the outline for the functioning of company and also identifies the rights, privileges, protection and obligations for the shareholders.
Therefore, the intention behind formulating shareholders agreement is to ensure that shareholders must be treated fairly and their rights are protected.
A shareholder buyout agreement is a kind of prenuptial agreement between the company and shareholders which deals with the situations where a question regarding the purchasing or buying out of the shares is decided in the event of the death of any shareholder and also in case wherein departing of any shareholder situation arises. Therefore, the below mentioned questions are decided through buyout agreement;
Thus, the object behind Shareholder Buyout Agreement is to ensure that unwanted buyer can be prohibited from gaining interest in the company. Moreover, also to determine the procedure regarding disposing of ownership in the company by a shareholder.
The deed of termination Shareholders Agreement comes into play when parties to shareholders agreement want to terminate their agreement. There are numerous reasons for which parties to shareholders agreement want to terminate their agreement, but generally the parties terminate agreement when a new investment is brought into a company and it becomes necessary for the existing parties to terminate the old agreement and form a new agreement.
Therefore, it is important to have all the parties’ signatory to the deed of termination which are parties to the existing Shareholders Agreement. In simple terms it means the parties which have signed shareholders agreement must sign the deed of termination.
Nour Attorneys Law Firm has a highly qualified team of lawyers and legal consultants which have extensive experience in drafting Shareholders Agreements. Our law firm works in a highly proficient manner in order to secure the interest of our clients.
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