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Transfer Of Shares In Shareholders Agreement

Posted on April 13, 2021 by admin-wanda in Uncategorized

Authorized transfers are often transfers of shares from an existing shareholder: to another existing shareholder; A company controlled by an existing shareholder or to the parent of an existing shareholder (e.g. B spouse, child, parent, spouse of such parent or trust formed for the benefit of an existing shareholder or his family). In this case, a “parent” can be defined to the extent or as closely as the shareholders wish or may be totally prohibited. As a general rule, a SHA contains clear language that, in the event of an authorized transfer, other shareholders (who do not transfer their shares) still need to obtain the agreement of a certain voting threshold. A SHA also often grants a right of pre-emption to shareholders, so that if the company does not or only partially exercise its repurchase rights, non-ceding shareholders have the primary right to acquire those shares in proportion to their ownership of existing shares. A SHA should clearly state the detailed mechanism by which shareholders exercise their pre-reference rights and how the shares acquired in this way must be paid. In the case of a voluntary transfer, unsold shareholders may have the opportunity to acquire more than their proportionate share shares if one of the other unsold shareholders does not exercise its prior decision-making rights. However, in the case of an automatic transfer, shareholders who do not sell generally have to acquire all the “offered” shares. If, for whatever reason, unsold shareholders are not able to fully exercise their rights of first refusal, the company should repurchase the shares, otherwise those shares could enter unwanted hands. The SHA may indicate that, in this case, the shares are paid in installments over a specified period of time.

PandaTip: Sometimes pay a fee for the transfer of shares and the issuance of new shares, it is probably less than 50 USD, but you can first check. If you want these costs to be borne by the transferor or shared between the two parties, you can change the clause above. 4. RESULTS OF THE FORMALITÉ IT is agreed that if the planned transfer of shares will not be effective due to a lack of formalities (including, but not only the incorrect registration of the transfer in the company`s registers or following a refusal by the directors of the company whose shares are transferred), the transfer of all economic shares of the shares by the creation of a trust in favour of the beneficiary in which the shares form the subject, and the assignor is the agent.


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