SHAREHOLDERS AGREEMENT

SHAREHOLDERS AGREEMENT

 

For [NAME OF COMPANY]

This agreement is made on this ________________ day of _____, 20_______

 

BETWEEN

 

[Names of all stakeholders, their addresses and positions e.g. Manager] 

WHEREAS:

  1.  The Company is a company incorporated in London and carries on tech-business;
  2. [NAMES OF SHAREHOLDERS] are the founding shareholders (the “Founders”) of the Company;
  3. [Names of all stakeholders] are all of its shareholders and the authorized capital of the Company consists of an unlimited number of common voting shares without par value, of which the following are issued and outstanding as fully paid and non-assessable:

 

Shareholder: No. of Common Shares: 

[Name] ______________

 

[Name] _______________

 

[Name] ____________

 

TOTAL COMMON SHARES ISSUED: ____________

 

AND WHEREAS the Company is doing business as a developer of software products located at [Office Address] (the “head office”),

NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions contained herein, the sufficiency of which is hereby acknowledged, IT IS HEREBY AGREED AS FOLLOWS: 

  1. DEFINITIONS
    1.  “Company” or “Corporation” means [Name of Company].
    2.  “Common Shares” shall mean the common shares in the capital stock of the company
    3.  “Issued Shares” shall have the meaning given in Article 5.
    4. “Meeting” shall have the meaning given in Article 5.
    5.  “Offered Shares” shall have the meaning given in Article 3.
    6. “Offeree” or “Offerees” shall have the meaning given in Article3.0.
    7.  “Parties” shall mean any two or more of [Names of all shareholders].
    8. “Seller” shall have the meaning given in Article 3.
    9. “Selling Notice” shall have the meaning given in Article 3.
    10.  “Shareholder” means any one of [names of all shareholders]
    11.  “Shares” means all the issued and outstanding common shares in the capital stock of the company beneficially owned by a Shareholder at any time.
    12. “Special Directors’ Resolution” shall mean a resolution passed at a properly constituted meeting of the Board of Directors of the Company, at which meeting 66% of directors in attendance are in favor of such resolution, or, in lieu of such confirmation, a resolution which is consented to by the signatures of all the Directors of the Company.  (Note: an Ordinary Directors resolution is one that is passed by a simple majority of all Directors in attendance at a properly convened meeting)
    13. “Unanimous Shareholders Resolution” shall mean a resolution passed at a properly constituted meeting of the Shareholders of directors of the Company, at which meeting more than 90% of the Shares are voted in favor of the Resolution, or, in lieu of such confirmation, a resolution which is consented to by the signatures of all the Shareholders of the Company.
    14. “Board” shall mean the Board of Directors of the Company. A “Director” shall mean any member of the Board of Directors of the Company.
    15. “Articles” means the articles of the Company filed at the office of the Registrar of Companies for the Province of [province] as may be amended from time to time.
    16. “this Agreement”, “hereto”, “herein”, “hereby”, “hereunder”, “hereof”, and similar expressions refer to this Agreement and not to any particular section, subsection, paragraph, or other portion of this agreement.
  2. ORGANIZATION OF THE COMPANY
    1. Governance
  1. The Company will be governed by a Board of Directors (the “Board”) appointed by the Shareholders as defined in this agreement.
  2. The Board’s primary responsibility is to the Company to ensure the viability of the Company as distinct from protecting the interests of any specific Shareholders or groups of Shareholders.
  3. The Board will appoint a Chairman who will preside over Board meetings and who will liaise between the CEO and other Directors and Shareholders.
  4. The Board will be responsible for appointing the President of the Company who shall be referred to as the Chief Executive Officer (the “CEO”) and who shall report to the Board on a regular basis.
  5. The President will, with Board approval, recruit other senior managers and executives of the company.
  6. There will be an Annual General Meeting (“AGM”) of Shareholders to appoint the Board for the ensuing year and to approve the appointment of accountant (and/or auditor).
  1. Composition of Board
  2. Compensation of the Board
  3. Meetings of the Board
  4. Directors, Shareholders, and Company Obligations
  5. Matters Requiring Unanimous Shareholders Resolution:
  1. RIGHT OF FIRST REFUSAL

 

(This section allows a shareholder to sell his/her shares to the other shareholders, failing which, s/he can sell them to other parties – with conditions)

  1. If any of the Shareholders wishes to sell, transfer or otherwise dispose of any or all of his/her Shares (such party being called the “Seller”), the other Shareholders (the Offerees”) shall have a prior right to buy such Shares (the “Offered Shares”) and the following shall apply:
  2. The Seller shall give to the Offerees notice in writing of his/her desire or intention to sell all or any of his/her Shares to them. Such notice shall be given in writing to the Offerees or by serving such notice upon the Offerees personally, and, if mailed, such notice shall be deemed to have been given to the Offerees on the second business day following the mailing thereof. This notice (the “Selling Notice”) shall set out:
  1. the number of Shares beneficially owned by the Seller;
  1. The number and class of Shares which make up the Offered Shares, the price and the terms and conditions of the sale of the Offered Shares.

 

  1.  RESTRICTIONS OF TRANSFER, ETC.
    1. No Shareholder, without the prior written consent of the remaining Shareholders, shall sell, assign, transfer, dispose of, donate, mortgage, pledge, hypothecate, charge or otherwise encumber or deal with any of his/her Shares unless in accordance with this Agreement.
    2. The parties hereby agree that notice of this Agreement shall be endorsed in red ink on all certificates representing Shares from time to time held or beneficially owned by them; and that a copy of this Agreement shall be maintained in the legal records of the Company.
    3. In the event that pursuant to any provisions of this agreement, any one or more of the Shareholders shall sell, assign, transfer or convey any of his/her Shares to any person, firm or corporation other than one of the present parties hereto, no such transfer shall be made or shall be effective and no application shall be made to the Company to register any such transfer until the proposed transferee enters into an agreement with the other parties hereto to the same effect as this Agreement, and any further agreement with respect to the Company to which the transferor is a party.
  2. TERM AND TERMINATION OF AGREEMENT

The Company shall have perpetual existence.

This Agreement shall terminate on the occurrence of any of the following events:

  1. the Company is dissolved, wound-up, surrenders its charter, makes an assignment in bankruptcy, makes a proposal to its creditors, or has a receiving order made against it;
  2. unanimous agreement of the Shareholders; or
  3.  Sale of the Company to another party.
  1. GENERAL COVENANTS
  1. This Agreement shall enure to the benefit of and be binding upon the parties and their respective heirs, executors, administrators and assigns
  2.  The parties agree to hold and cause to be held all such meetings of directors and Shareholders of the Company and to deliver and execute all such documents as may be necessary to give full effect to this Agreement.
  3. This Agreement shall be construed in accordance with the laws of British
  4. Words in the singular shall include the plural and vice-versa, and words importing the masculine shall include the feminine and the neuter and vice-versa, and words importing persons shall include corporations and vice-versa.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate, each of which shall be considered an original, by them/respective signatory officials thereunto duly authorized as of the day and year first above written.

 

Signed by or on behalf of:

 

THE UNDERSIGNED HAVE READ, FULLY UNDERSTOOD AND BY SIGNING BELOW, ACCEPTED THE TERMS OF THIS AGREEMENT 

 

) [Names, Signature and date]

 

) ___________________________

 

) [Names, Signature and date]

 

) ___________________________

 

) [Names, Signature and date]

 

) ___________________________

 

) [Names, Signature and date]

 

)___________________________

 

) [Names, Signature and date]

 

) _______________________ 

 

SCHEDULE A: 

List of all Parties to this agreement, showing their names, addresses, and number of Shares held in the Company.

 

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