Where a company has two or more shareholders holding joint (voting) shares, these individuals often enter into an enforceable shareholders` agreement that sets out their collective intent with respect to their privileges, protections and obligations as shareholders of the corporation. A duly structured shareholders` agreement serves both the interests of minority shareholders and controlling shareholders, although it is generally more important from the perspective of a minority shareholder. A minority shareholder is defined as a shareholder who owns 50% or less of the outstanding shares and therefore cannot unilaterally control the affairs of the company. The main rule for start-ups should be to coordinate all spending on new shares and transfers of existing shares. Wild sales should not be allowed. For the founders, the easiest way might be to agree that all questions/transfers can only be done by qualified majority (see point 3 above). The provisions relating to controlled and/or forced exits (Drag Along, Tag Along, etc.) are essential elements of VC (Venture Capital) but are less important at the outset. The right of severe pre-emption is generally preferable from the point of view of the person who has the right to refuse. Third-party buyers will rarely spend much time evaluating a possible share acquisition, given the predominance of the right of pre-emption. The flexible right of pre-emption is generally better from the supplier`s point of view.

Although it obliges the potential seller to be disciplined in setting the initial price and the conditions offered to the shareholder who holds the right of first refusal, the seller is able, in the event of non-compliance with the offer, to exchange with third-party buyers who are not burdened by a right of pre-emption. While there are also certain expectations of shareholders, these commitments and expectations must be set out in a shareholders` agreement, as they are unlikely to be covered in a standard constitution. A advisable option to streamline the management process of a narrow company is for shareholders to approve an annual operating budget and an investment budget each year, and then give a shareholder (if that shareholder is involved in running the business) or a company executive the authority to manage the day-to-day operations of the business within approved annual budgets. Once such budgets have been approved, shareholder approval will only be required for measures that are not outside the approved budgets. Additional flexibility can be put in place by allowing that shareholder or their senior managers to act above or below agreed budgets in a percentage. . .