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The shareholders agreement should set out matters that are reserved for the board and those matters that will require shareholder approval. It will also set out the level of majority required to pass a particular resolution. Decisions reserved for the board typically relate to the day?to?day management of the company.
Pre-emptive rights and right of first refusal clause These clauses protect existing shareholders from the involuntary dilution of their stake in the company. Pre-emption rights provide the company's existing shareholders first offer on an issue of new shares; or first refusal over the sale of existing shares.
Protecting Your Rights As A Shareholder First, every shareholders' agreement that you sign should include a buy-sell provision. This allows you to get rid of your shares and leave a company if you need to do so, or acquire more if you are so inclined.
A good shareholders agreement should set out the decisions a shareholder-director may and may not make without agreement from others. These are known as reserved matters. Disclosure of decision making is also important. A shareholder-director may be able to make decisions that aren't reported to other shareholders.
Main Features of Shareholders Agreements A list of material things which cannot be done without the prior consent of the investors. ... A right to information. ... Warranties from the management team. ... Restrictions on transfers of shares. ... Restrictive covenants.
This section is intended to offer protection to the value of members' shareholdings. The deceptively straightforward provision requires members to approve any disposition of more than 50% of a company's assets that is to be made outside the ordinary course of the business.
In the BVI, companies are required to keep a PSC register that lists the individuals and entities that have significant control over the company. This information is required to be filed with the Registrar of Corporate Affairs, who may make this information available to the public.
Under BVI law, shareholders are not entitled to intervene directly in decisions made or actions that may be taken by the directors. The directors of the business company are required to comply with their common law duties as well as specific duties which are imposed on the directors under the BC Act.