The IDSSA contains fairly standardized pre-emption provisions for share transfers, which give existing shareholders the initial refusal to buy shares for sale in proportion to their existing stake, as well as control over who else can become a shareholder. Transfer provisions also apply, so a person must offer their shares for sale if they are back as a director or die. Finally, there is drag (which requires minority shareholders to accept an offer to buy the company by a third party if at least 75% accept the offer) and tag (which allows minority shareholders to participate in each sale of the company at the same time and at the same price as majority shareholders). A shareholders` agreement can be a way to reassure a shareholder who is not a director that another shareholder, who is also a director, will devote sufficient time to the business. This can be very subjective and is therefore not a determination within the IDSSA. If a provision that requires someone to dedicate their time is appropriate, we recommend that you seek specific legal advice to create an appropriate clause. Once the company has been in existence for several years, it will likely be necessary to transfer or sell shares to another shareholder. To protect your stake in the business, you can be as detailed as you want when it comes to selling or transferring shares. In the shareholders` agreement, you can make provisions that may restrict certain transfers or sales, or you can look at it from the perspective of the types of sales or transfers that would be allowed. The reasons for these arrangements are as follows: IDSSA requires that the Company`s issued share capital position be recognized at the time of signing the shareholders` agreement.

It is important to do this correctly, because one of the most important reserved issues is the prohibition of any change in the share capital of the company. This means that directors cannot issue new shares or convert existing shares into a new class (possibly with a higher dividend right) without all signatories agreeing to the change. For example, some decisions may be left to the CEO or CEO, while others may require the unanimous approval of all shareholders. Our last article dealt with why and when a shareholders` agreement should be used: the methods by which shareholders can control a company and the advantages of a shareholders` agreement over the use of different classes of shares. Directors run the business. They are accountable to the shareholders. Thus, your agreement can set the role of an administrator or the limits of his authority. A member can be as active as they want, from a director to an active supporter offering advice to a “dormant” lender that only provides financing. Your agreement should reflect what happens when a member wants to be more or less active in the day-to-day management of the business. ex. B for personal gain, after a dispute or injury, or to repay a debt elsewhere).