Shareholders Agreement Sample Kenya

As a general rule, it is preferable to implement a shareholders` pact when the company is created and issues the first shares. Indeed, it can be positive to ensure that shareholders` expectations of the company are shared. At this stage, shareholders should, as far as possible, be in the same way about what they expect and receive from the company. If the differences of opinion between investors at this stage are too strong to enter into a shareholder pact, it will probably sound a warning about the nature of their future working relationship. The shareholders` pact should detail how a shareholder can sell his shares (how he withdraws). This should be clear in terms of process, communications, timelines, evaluation and methodology. The evaluation of actions is extremely important and needs to be carefully considered. Difficulties can arise when the shareholders` pact involves an overly complex decision-making structure, a very long list of issues requiring special agreement from the board of directors or shareholders, or when it sets dollar thresholds acceptable at the beginning of the activity, but which become too low to be passable over time. 1.1 The shareholders are all shareholders of the company, a company [STATE OF INCORPORATION] and are the sole directors and senior executives of the company. PandaTip: The distribution or resale of shares outside may be accompanied by a large number of legal provisions that this agreement does not seek to address, which is why this clause is important. One of the essential objectives of a shareholders` pact is to clarify what can lead to termination and what are the consequences of the different paths to be followed by the parties. PandaTip: This section ensures that shareholders have the same expectations about when they can withdraw money from the company and ensure that distributions do not compromise the company`s financial needs.

They may also consider including provisions regulating the acquisition of capital to avoid dilution of existing shareholders. This is especially relevant if you were a major investor. What is a shareholder contract? A shareholders` pact is a document involving several shareholders of a company, which details the results and concrete measures that are taken in the event of the departure of a shareholder of the company, whether voluntarily, involuntarily or when the company ceases operations. A shareholder pact must determine the maximum number of directors and the percentage of shares required to appoint a director. It should also specify when and how a director can be removed, what his duties are, how meetings are convened and how he will vote (i.e.

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