Call options in the SHAs haunt shareholders or the entity to compel a shareholder to sell its shares to them or the company at a certain price or a predetermined formula. A call option includes triggers other than automatic transmissions and can be an effective way to remove a shareholder from a company. A call option may be limited and cut to be exercised at a later date or date or caused by certain events such as. B where: shareholders cannot agree on specific issues; it is not possible to reach the level of approval required for specific issues, such as investments or dividends; or a shareholder is simply a problem, causes trouble or is incompatible. Shareholder agreements are different from the company`s statutes. If the statutes are mandatory and the management of the company`s activity, a shareholders` pact is optional. This document is often developed by and for shareholders and sets out certain rights and obligations. It can be very useful if a company has a small number of active shareholders. External financing and associated conditions are generally determined by a company`s board of directors and must be linked to all guarantees in a SHA. In this case, the SHA may stipulate that such external financing must be obtained without guarantee or support from shareholders (unless everyone gives their prior consent). A mediator or arbitrator should be used if the parties are in a deadlock about a problem. Mediation and arbitration are superior processes if involved in a long-term relationship and the survival of the business relationship is desirable. If the dispute is not resolved and goes to court, a judge may decide on a compromise that is not desirable for any of the parties, possibly to dissolve the business.
But if both parties agree to choose a neutral third-party agent or arbitrator to resolve the dispute, the business relationship can continue successfully. 1.4 Contracting parties undertake not to enter into agreements or to assume any obligations of any kind that may prevent compliance with the provisions of this shareholder agreement. In addition, a SHA is private, between the parties to the SHA, while the statutes are public, making them unfit to deal with issues such as the remuneration of directors and the provision of private contact information or other sensitive or confidential internal matters. In addition, a SHA is an inexpensive way to minimize the potential for commercial litigation by specifying how certain decisions need to be made and providing a framework and dispute resolution procedures. In strict legal theory, the relationship between shareholders and those between shareholders and the company is governed by the company`s constitutional documents. [Citation required] However, for a relatively small number of shareholders, such as in a start-up, it is common in practice for shareholders to complete the constitutional document. There are a number of reasons why shareholders intend to complete (or withdraw) the company`s constitutional documents: if a shareholder has not fully or partially subscribed to its share of the shares in cash call until the specified date, the other shareholders may acquire the remaining shares. When a cash call results in the acquisition of new shares by a shareholder, either directly or via a loan convertible into shares, it ultimately results from the dilution of the shares of shareholders who did not participate in the cash auction.