In the past, many businessmen have structured their transactions with their business partners on the basis of a verbal understanding of the company`s corporate governance proposal and their behavior in case of special circumstances. This has been and remains very common in family businesses where the trust of family members is considered unshakable. Shareholder agreements were traditionally entered into by “big entrepreneurs” who had access to the best legal and business advice. However, in recent years, there has been a paradigm shift among small and medium-sized enterprises, whose shareholders and directors now see the value of entering into shareholder agreements. The critical need for such agreements to protect your interests becomes very obvious: It is not easy to remove a director or shareholder, so make sure to understand your rights and obligations before giving someone decision-making power or financial ownership of your business. Impeachment requires careful consideration of the provisions of the Constitution and shareholders` agreement, the Corporations Act and any other applicable appointment or employment agreement, in order to determine who has the right to appoint directors and under what circumstances they may be removed (and when shareholders may be withdrawn or a share repurchase may be made and at what price). Notwithstanding the nomenclature, many shareholder agreements go beyond shareholder considerations and contain details of the powers, rights and agreements of directors to the extent that the management of the company is concerned. This is especially common when the company`s shareholders and directors are one and the same. The UK Companies Act 1985 addresses this challenge by recognising the concept of `a person`s reunion`. The UK provision provides that, where the company of a single man makes a decision to be taken by the company at the general meeting, the decision must take the form of a written decision or that each member of the company must provide a written record of this decision. Failure to comply is punishable by a fine, but non-registration does not invalidate the decision. The British provision puts some order in the operation of one-man companies, since it can force one-man companies to keep a record of company decisions for the benefit of existing and potential creditors, as well as potential shareholders and directors who could join the company later What is this value we are talking about? The shareholders` agreement offers a roadmap for the activity and well-elaborated shareholder agreements try to anticipate the main decisions that are incumbent on the shareholders and / or directors of a company, so that from the date of creation, the parties concerned have had the opportunity to give their opinion on what should be taken in the case of certain listed circumstances or on the decisions to be taken, to express themselves appropriately.
In this regard, the author considers that a pre-marriage contract is analogous. Similarly, shareholders and / or directors, to the extent that a couple can conclude a post-marital contract (i.e. after marriage), can also conclude a shareholder contract after the creation of a company. However, it is advisable to conclude this type of agreement from the beginning, as it reduces the likelihood of disputes, facilitates security and the management of expectations. When appointing or dismissing such directors (and when designing agreements), it is important to consider all relevant agreements so that they are simultaneously revoked as employees, directors and shareholders. This avoids circumstances in which employees or directors are removed, but their shareholder voting rights are maintained, or the termination of a director without due regard to labour law obligations.