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Shareholders Deed of Agreement

Shareholders Deed of Agreement
Document Type: Microsoft Word
Build Time: 10 Min

This Shareholders Agreement Template is up to date with the new Companies Act which came into effect from 1 May 2011. There is currently an Amendment to this Act which has recently been signed into law, if you purchase this Shareholders Agreement Template and the Amendments alter this document in any way you will be provided with an updated version free of charge.

Shareholders Deed of Agreements are often used in three situations:

1. Where a business is being conducted through a company, in this case there are normally two or more shareholders all of whom work in the business, want a say in the management by being on the board and need to be protected against some majority decisions e.g. Change of business, sale of business, declaration of dividends, mortgaging the assets, changing the structure of the business, giving guarantees etc.;

2. Where two or more existing companies which conduct their own businesses enter into a joint venture for a particular purpose and they will use a company as the vehicle to conduct the joint venture. An example could be where a supplier and a distributor are both needed for the purposes of entering into a contract for a large project. They may set up a joint venture company to enter into the contract. They will want a shareholders agreement to set out their respective rights, obligations and responsibilities;

3. When a company wishes to raise funds by bringing in a passive investor who/which will contribute funds by way of share capital. The shareholders agreement will be necessary to set out the rights, responsibilities and obligations of the existing shareholders (who usually have a continuing active role managing the company) and the new investor shareholder(s) who may only have a passive role.
There are extensive notes attached to this Shareholders agreement which provide further information and assistance.

It is expressly provided in this agreement that the rights and obligations set out are in addition to all rights and obligations contained in the constitution of the company and in the Companies Act 1973.

This Shareholders Deed of Agreement includes the following provisions:

1. Interpretations and Definitions,
2. Commencement,
3. Board of Directors,
4. Proceedings of the Board,
5. Covenants by Shareholders and Directors,
6. Shareholders' Meetings,
7. Dividend Policy and Shareholders' Loans,
8. Signing Of Cheques,
9. Financial Reports and Financial Year,
10. Restrictive Covenants,
11. Amendments to the Constitution,
12. Confidentiality,
13. Provision of Information and Inspection of Records,
14. Duration and Termination,
15. Default by a Shareholder,
16. Mutual Co-Operation and Good Faith,
17. Public Policy,
18. Governing Law,
19. Denial of Merger,
20. Notice,
21. Assignment,
22. Costs and Expenses,
23. Counterparts,
24. Variation, and
25. Whole Agreement.

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