Shareholder Agreement Template Hong Kong

Trading partners often share common and/or complementary skills, which originally justifies their cooperation. But what if such partners want to divide or develop parallel activities? Shareholder agreements may include non-compete clauses and non-invitation clauses that define in advance the limits within which shareholders can engage in competitive activities. CET ACCORD, dated [ACCORD DATE] is concluded between the following persons, who constitute all the current shareholders of [CORPORATION] („Corporation“): Legally, a shareholder contract is a contract between the founders of a company to (i) define their respective rights and obligations and (ii) organize the management of that company. It is not a question of regulating the day-to-day operation of a business, but of dealing with some key issues in this regard. 1.1 The shareholders are all shareholders of the company, a company [STATE OF INCORPORATION] and are the sole directors and senior executives of the company. Sometimes disagreements between shareholders lead to deadlocks where the company cannot make a decision. It can seriously harm his day-to-day business. To avoid this, shareholder agreements may offer exit strategies that may force one or more shareholders to purchase others. In this case, it is recommended to refer to independent expertise or to choose a pre-established formula to determine the value of the shares of the outgoing shareholder. The „drag-alone“ option id When a majority shareholder (or group of shareholders) intends to sell its shares to a third-party buyer, the Drag-along plan gives it the right to compel the remaining (usually minority) shareholders to sell their shares on the same terms to the same purchaser. This will ensure that the third-party buyer will be able to acquire the entire business, which could be decisive in the negotiations on the sale. The drag-along mechanism is a drastic measure and minority shareholders must understand their effects before approving it.

Make sure a full shareholder pact is reached. This will protect your business partners in the event of a dispute or if someone wishes to withdraw. The Tag Along option is that when a shareholder intends to sell its shares to a third-party buyer, a Tag along option will allow other shareholders to „tagger“ the sale, i.e. sell their own shares together to the same third-party buyer on the same terms.