Company law
Shareholders’ agreements
When working with others, it is important that everyone is ‘singing from the same hymn sheet’. It is often assumed that this is the case, certainly in the early stages. In practice, however, certain aspects are often not discussed and it is not clear what everyone wants or expects. This can have unpleasant and expensive consequences, especially where simply dissolving the partnership is not possible.
Many of the issues described in this section apply to various legal entities, including partnerships, general partnerships and cooperatives. However, our specific focus is the private limited company (BV) and public limited company (NV). The law, and hence most Articles of Association, assumes that the shareholder’s only role is that of financier. In the absence of effective Articles of Association, accompanied by a clear shareholders’ agreement, there are numerous potential pitfalls and little or no opportunity to sever ties with a shareholder who acts against your wishes.
A shareholders’ agreement can include provisions covering aspects such as:
- a qualified majority requirement for certain types of resolution;
- special obligations to offer shares for sale;
- restrictions on directors’ powers;
- arrangements regarding unequal payments in respect of shares;
- arrangements regarding shareholders’ special appointment and/or nomination rights;
- specific retained earnings accounts;
- exclusion of third-party influence or control;
- drag-along provisions which allow the majority shareholder(s) to require the minority shareholders to sell their shares, and tag-along provisions enabling minority shareholders to sell their shares on the same terms and conditions as the majority shareholder(s);
- a valuation clause in the event of a sale of shares to the existing shareholders;
- (deferred) payment provisions;
- arrangements which serve to reduce inheritance tax liability in the event of a shareholder’s death;
- future financing of the company;
- dividend policy;
- non-compete clause;
- non-solicitation clauses;
- management agreements;
- a lock-up period.
It is important to ensure that there are no conflicts between the contents of the shareholders’ agreement and the Articles of Association.
Please contact us for further information. We shall be pleased to help you draw up an effective shareholders’ agreement or management agreement, or amend your existing Articles of Association.
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