The MOI prevails over all other shareholder agreements, so if it conflicts with the purchase and sale agreement, the provisions of the MOI prevail. Thus, if a purchase and sale contract is concluded, the MOI may need to be modified so that there is no conflict between the two. I am a shareholder of a private company and I want to get rid of my shares to free up cash flow. That is, I don`t want to sell to a foreigner and my other shareholders don`t want to buy my shares either. One of them suggested that the company buy back my shares. Is that allowed? The agreement includes sections describing the fair and legitimate price of the shares (especially when they are sold). It also allows shareholders to make decisions about external parties who could become future shareholders and provides guarantees for minority positions. Shareholder agreements often require certain types of matters to be approved by shareholders under a special resolution. However, the new Companies Act explicitly lists certain matters that must be approved by a special resolution, and the MOI model form often states that only these matters need to be approved by a special resolution.

This may result in cases where approval in the form of a special resolution is no longer required for matters listed in the shareholders` agreement that have not been included in the MOI. These provisions set out the rights and obligations of shareholders to dispose of their shares in certain circumstances, including insolvency, disability, death or retirement. In general, a pricing or evaluation mechanism should be included. A shareholders` agreement should determine the consequences for a shareholder who violates the agreement and include a prompt procedure for resolving disputes between shareholders as parties. Arbitration is proposed as a quick way to resolve disputes between shareholders. As with all shareholder agreements, an agreement for a start-up often includes the following sections: Some shareholders are just shareholders, not directors of a company. However, shareholders may be granted “observer rights” to attend meetings of the board of directors (or parts of those meetings), but may not vote. Since a shareholder agreement is fundamental to the operation of shareholders, it is important to carefully consider how the EM relates to the shareholders` agreement.

Therefore, any conflicts must be resolved when drafting a new self and/or a shareholders` agreement. When it comes to the MOI and shareholders` agreement, it`s simply best to err on the side of caution and hire an experienced lawyer to create custom documents. The court refused to grant the order, saying the issuance of the new MOI was legal and in compliance with the requirements of the Companies Act. The shareholders` agreement was so contrary to the MOI that it was now de facto null and void. CIPC offers free MOI templates, but they are very basic and we do not recommend that they be used. They omit many important clauses that we can incorporate into a tailor-made MOI to protect minority or majority shareholders or even just a specific shareholder. The standard provisions of the Companies Act in the moIs bill can also be amended to suit one or some of the shareholders, and so at least the MOI bill should be carefully amended by a lawyer to suit the client, and not just passed as is. It is recommended to consult a lawyer when creating a tailor-made MOI to include the protection of the shareholder that the lawyer represents.

Purchase and sale agreements are entered into when shareholders purchase an insurance policy for the life or disability of another shareholder, so that in the event of the death or disability of the other shareholder, the first shareholder receives the funds through the policy so that he or she can afford to purchase the shares of that other shareholder. However, when insurance companies draft these agreements, they often lack the consistency and detail of a legal document written by a lawyer. And most importantly, insurance companies do not check whether the purchase and sale contract contradicts what is already recorded in the MOI regarding the death or disability of a shareholder. These clauses set out the procedure to be followed before the issue or transfer of new shares. In addition, when a person becomes a shareholder of the corporation, they are generally required to sign a “certificate of membership” in which they agree that the shareholders` agreement binds them. There are also differences in how documents retain new shareholders. The MOI automatically binds new shareholders without their explicit consent, whereas a shareholders` agreement must be concluded before it is binding. .