Share Purchase Agreement Joint Venture

Birgit Pauli-Haack  

The main advantage of a share sale is that the underlying entity is not concerned and controls transfers from a shareholder to the new purchaser. The procedure can be relatively simple, provided that the necessary authorizations are obtained and obtained by third parties and administrative authorizations. I am often asked, “Can you make shareholder agreements and how much do they cost?” The short and fair answer could be a kind of “yes, between $200 and $20,000.” Plus VAT.” I don`t think it`s going very well. Instead, I could say, “Why do you want a shareholders` pact?” or “What does the shareholder contract have to cover?” The answer is often: “I don`t know; But I was told I needed it! (8) ABC subscribes – % of the authorized capital of the joint venture company and XYZ subscribes to the incorporation of that company – %% of the authorized capital and pays these shares at the request of that company at the request of these shares within the prescribed time frame; What people really need is advice on why they want a shareholder pact and what they might want to say about it. Development can only begin after reviewing this advice and be able to give clear instructions. But it is very difficult to give an estimate for the Council itself. Each situation is different and it may take some time for a client to digest the advice and decide exactly what they want. They often think they need to think about some of the fundamental issues that they have not yet addressed properly. Should the chairman of a shareholder meeting or board meeting vote? Who should be the president? Should a shareholder be allowed to transfer shares to certain family members or family trustees? If shareholders have unequal shares in the joint venture, the shares of the majority shareholder are likely to be more marketable if they are able to deliver 100% of the joint venture to an acquirer. Conversely, a minority shareholder may not be interested in a joint venture with a new majority shareholder that he or she does not know. The “drag along” and “tag along” (or “co-sale” rights are the mechanisms often used in shareholder agreements to address these concerns. If so, to whom? Z.B. to an interconnected group of shareholders first, then to others? How should these actions be evaluated? Should there be a discount to reflect the fact that they left prematurely or did not do as much as expected? Most investors and other shareholders of private companies are pleased that the company is managed by management, as appointed by the founding shareholders or majority shareholders; but they want to build in the ability to protect their interests when they think things are going wrong.

This could prevent “controlling” shareholders from driving the company too much with their own interests, or simply comforting minority shareholders to intervene if they feel the company is mismanaged.