Shareholders Agreement Luxembourg

17. Dezember 2020

The objective of a shareholders` pact is to establish a healthy and transparent relationship between the shareholders of a company. In conclusion, while the development of a shareholder contract may seem tedious, it can define structural principles for the life of the company or the relationship between shareholders. On the other hand, stability can also be achieved through the implementation of corporate governance rules for the smooth running of the company. In this case, a SHA can be compared to a marriage agreement with two main objectives: (i) regulate the relationship between first shareholders and investors (defining obligations and rights, defining different quorums and majority votes according to themes, drawing up the list of reserve mats, etc.) and (ii) establishing rules in advance that address conflict situations or complex situations , the possibility for shareholders to leave the company in some way that would not have a negative effect on the current operation. To this end, the option to start, call and put you on sale is provided, while in the case of drag-along and tag along sales clauses are taken into account. Finally, voting transfer clauses allow shareholders to transfer their voting rights regardless of the security. The validity of these clauses is controversial. Part of the doctrine considers that such clauses would be illegal, to the extent that the right to vote would be a public policy prerogative linked to the status of the shareholder and, therefore, a non-transferable prerogative. The authors who share this view argue that the right to vote is a complement to social law and that the shareholder guarantees compensation for the risk he takes as a shareholder. Non-portability is justified by the protection of the shareholder who, in the event of a transfer, would lose the guarantee of the protection of his interests.

Are transactions generally closing conditions? Describe the usual completion conditions for a seller and all other conditions that a buyer wishes to include in the agreement. A shareholders` agreement is a private agreement in which all shareholders or certain shareholders of a company expose their rights and obligations to that company, as well as the decision-making and investment processes. It is a bespoke contract that allows its signatories to agree on certain points, clarify relations between the various parties and resolve any potential disputes. Although this is not mandatory, it is recommended that a shareholder contract be created by a lawyer, lawyer or professional. Remember that a shareholder contract is a contract that is required of all signatories. However, it is not binding on the company, for non-signatory shareholders, on new shareholders (unless they sign the agreement) or on third parties. Today, these debates do not theoretically exist any more, since the aforementioned law of 10 August 2016 now explicitly recognizes that „the exercise of voting rights may be subject to agreements between shareholders“.