It may be desirable to grant all shareholders the right to acquire shares from a shareholder who wishes to sell his shares before his shares are sold to a third party (i.e. a right of pre-emption). How does a seller offer shares? Acceptance times? There should be provisions for pro-rata distributions of undealed shares. How can a shareholder (s) offer to buy shares from other shareholders? Another concern is where a minority shareholder could transfer its shares to anyone. This could create problems for other shareholders, especially if the sale is made to a competitor or someone else who does not want to involve other shareholders in the company. But conversely, forcing a disgruntled shareholder to stay can create more problems than having a new unknown shareholder interested in the success of the company. All shareholders must agree to make business prosper. To overcome these problems, shareholder agreements often contain rules on share sales and transfers – to whom shares can be transferred, under what conditions and at what price. Businesses must comply with the law.

Companies are registered in a specific jurisdiction (for example. B, the state, the province or the country) and must comply with applicable laws, for example. B the Canada Business Corporations Act or the B.C Corporations Act. This legislation sets out the basic rules for corporate governance – what you can do or not, z.B. who can become a director? Can a company issue shares? How can you buy or sell shares? Etc. When setting up a company, it submits a memorandum and a statute (according to the jurisdiction) which are public documents filed with the Registrar of Companies. A shareholders` pact is confidential and its contents are not submitted or made public. In addition, a majority shareholder wants to prevent minority shareholders from disclosing confidential information to competitors or from creating competing companies, each of which may be included as a provision in the agreement.

However, the main provisions to be considered for inclusion are those relating to: 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 want to supplement (or take over) the company`s constitutional documents: the agreement contains sections that explain the fair and legitimate pricing of the shares (especially during the sale). It also allows shareholders to make decisions about what external parties can become future shareholders and offers guarantees on minority positions.