Establish rules about what happens when a particular shareholder fails to meet its obligations to the company. 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. In addition, shareholder agreements often provide that shareholder agreements focus on the coordination of shares and the terms and guarantees of those shares. The aim is to define the rights, duties and obligations of the company and shareholders, as well as their relationships. Transfer restrictions exist to protect the company and other shareholders from undesirable third parties who become shareholders or who could protect the company if an existing shareholder violates its obligations to the company or puts itself in a situation that could seriously damage the company`s reputation. Once the business exists for several years, it will probably be necessary to transfer shares or sell them to another shareholder. In order to protect your share of the business, you can be as detailed as you like when it comes to selling or transferring shares. As part of the shareholders` pact, you can make arrangements that may limit certain transfers or sales, or you can consider them from the perspective of the types of sales or transfers that would be allowed.
The reasons for these schemes are: shareholder agreements, like other contracts, are governed by state law.