Shareholders Agreement Hk

We have also created a framework for the development of a shareholders` agreement for Seed and Series A fundraising, i.e. with 2 categories of founding members and investors. Although the final development will depend on negotiations between investors and founders, Hong Kong`s start-up market tends to become a certain standard that is reflected in our framework. In addition to taking into account the provisions of the shareholders` agreement, it may also be necessary to bring the articles of association or other constitutional document of the underlying entity into line with the provisions of the shareholders` agreement. We focus our questions and comments on the goal of creating a relevant document that offers a structured approach to the life – and crisis – of the company until the next turning point/shareholders` agreement. In this sense, it is important for a lawyer to establish a written agreement covering areas such as indemnification, exit clauses, roles and responsibilities. Shareholder agreements are not necessarily intended to regulate all day-to-day operations of the underlying business, but rather govern the relationship between shareholders with respect to certain key issues. In this regard, when new shareholders come together to launch or continue a project, it is important to discuss and understand both the expectations of the other parties and the underlying company, to ensure that they are « on the same side ». As such, shareholder agreements may be complete or limited depending on the nature of the relationship between shareholders, the nature of the activity concerned and the participation structure of the company concerned. The typical provisions contained in shareholder agreements are: litigation: when disputes arise, there is often little that helps in the general law, and sometimes the only solution may be to dissolve the company, even if the company itself succeeds. A shareholder`s agreement can be a very useful instrument for preventing and managing such disputes and include provisions that define a dispute resolution mechanism for the parties, without the need to take drastic measures such as the dissolution of the company. To resolve a dispute, one or more shareholders may sometimes agree to sell their shares to other shareholders. The shareholders` agreement often contains valuation provisions to ensure a clear mechanism for evaluating these shares and to avoid a new dispute over the price to be paid. In each investment cycle, a new category of members who have invested on different terms and who have different expectations from the previous ones is added, which makes the shareholders` agreement increasingly complex, possibly with classes of shares with different voting rights or economic rights (for the payment of dividends, in the event of withdrawal or liquidation).

Shareholder agreements are usually concluded and verified at the turning points in the life of a company, such as: a shareholders` agreement defines the framework of the relationship between the shareholders of a company that will determine the activity of the company. We have extensive experience in supporting our clients in representing majority and minority shareholders in the context of a shareholders` agreement and the negotiations that have been accompanied by it. As a general rule, a majority of shareholders (51%) can appoint and dismiss members of the board of directors. Such a power allows effective control of the company. It cannot be fair to minority shareholders, especially when they hold substantial shares (up to 49%). Instead, shareholder agreements can give minority shareholders the right to appoint a director, allowing them to retain some control over the governance of the company. The impasse is a situation in which two shareholders or two groups of shareholders are unable to agree on certain key issues. A deadlock occurs when general meetings are not adopted repeatedly because one group of shareholders refuses to participate, or when a group of shareholders votes or abstains on a proposal for a decision of the other group.. . .