Shareholders Agreement

Shareholders Agreement

Shareholders Agreement is executed amongst the members of the Company with the management of the company relating to rights and obligation of members, shareholders and management. Shareholders Agreement contain provisions as per Companies Act 2013.

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Addition of Directors, Removal / Resignation of Directors, Increase in Authorised Share Capital, Share Transfer and Transmission, Shareholders Agreement, Removal of Directors disqualification, Revival of struck off companies, Change Company name, amendment in MoA and AoA

Shareholders are the investors of the company; they are the real owners of the company who enjoys the profit of the company in the form of appreciation in their share prices. Shareholders does not take participate in day-to-day routine activities of the company, but shareholders can exercise their right to vote on certain matters related to the company.

Thus in order to ensure transparency and defining the rights and obligations of the shareholders, Shareholders Agreement comes in place. A shareholders Agreement is an agreement executed amongst shareholders of the company with the Key Management Persons (KMP) of the company who entrusted with day-to-day routine activities of the company. Shareholders Agreement is commonly abbreviated as SHA.

Purpose of executing Shareholders Agreement:

  • Defining Rights and Obligations of the Shareholders
  • Protecting the interest of the shareholders
  • Protecting interest of minority shareholders
  • Outlining the procedures for transfer and transmission of shares.

Contents of Shareholders Agreement (SHA):

  1. Definition: This section contains the definition of various parties, terms and also outlines the execution of SHA amongst various parties.
  2. Management of the Company: This section contains various Key Management Personnel (KMP) who are part of management of the company and who also entrusted for protecting the shareholders interest in accordance with SHA.
  3. Board of Directors: This section contains composition of Board of Directors and various committees formed under Board of Directors for proper and smooth functioning of the organisation.
  4. Matters requiring Consent: This section contains the matters which require consent of shareholders as per SHA in case such event arises.
  5. Rights of a Shareholder: This section contains various rights and obligation exercised by the shareholder in accordance with SHA. This Right includes Right to vote, Right to call for General Meeting, Right to appoint directors, Right to appoint Auditors, Right to inspect financial statement and various books and registers of the company.
  6. Regulation with regard to transfer and transmission of shares
  7. Conditions which warrant quorum.
  8. Valuation methods of the company which also contain the approach of valuation method need to consider while calculating EPS of the company.
  9. Manner of functioning of the company
  10. Liabilities of shareholders containing the liability for unpaid shares and the shareholders are not liable for routine activities of the company.
  11. Protecting interest of Minority shareholders containing the procedure to appoint the minority shareholders director on the board.

With the ever changing Law and regulatory requirements, we keep on track and advise the same on timely manner in order to ensure proper compliance. We at ReturnFilings.Com will understand the purpose of your Shareholders Agreement (SHA) and thereafter will provide you detailed analysis mentioning the law requirement and compliances need to fulfil in order to provide Shareholders Agreement (SHA) related services economically and efficiently. We at ReturnFilings.Com will provide you details of regulatory filings in order to ensure proper smooth and timely compliances. We at ReturnFilings.Com are determinate to provide end to end solution; our motto is you concentrate on your business while we at ReturnFilings.Com will take care of all your compliances need.