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The establishment of a shareholder contract and the discussions that will necessarily form part of the content decision will lead shareholders to address potentially important issues that would otherwise have been overlooked. It also implies that shareholder agreements often overlap with the provisions of a Constitution. However, they generally contain more sensitive information about corporate affairs, such as the role and remuneration of shareholders, dividend policy, financing of growth strategies, mandatory stock selling rules in certain circumstances, and dispute resolution rules. This agreement contains questions relating to the management of the company and the relationship between shareholders (for example.B. The right to appoint directors, matters requiring the agreement of directors appointed by the investor, the provision of financial information, confidentiality rules, etc.). Think about the need for a shareholder pact – in some cases, a shareholders` pact is not necessary, as the company`s basic requirements may be included in the statutes (e.g.B. pre-emption rights and tag rights along and drag-along). This series of New Zealand shareholder agreements aims to define the rights of all shareholders, both majority and minority shareholders, and to protect their interests and investments. As with most aspects of a New Zealand business that manages a business, the power of a company to issue shares of COMPANIES ACT 1993 and the content of the company`s incorporation (if any). Subject to any limitations of the law or the Constitution, the Board of Directors of the Company may at any time issue shares to any person and in any number, as the board of directors elects. The issuance of shares is therefore exclusively at the discretion of the board of directors. Susan and Nancy`s relationship quickly grew – Nancy often failed to convince Susan to sign a “special resolution” necessary for a company to complete a “big deal” (the 1993 Companies Act requires at least 75% of shareholders to approve major transactions).
As a result, BEL`s profitability and shareholder working relationship have suffered. Siblings Nancy and Benjamin Button each own 50% of Button Enterprises Limited (BEL); they are the managers of the company. There was no Constitution or shareholder pact. Over the years, they have successfully run their business. Her only problem was the bad relationship between Nancy and Benjamin`s new wife, Susan. The day-to-day management of the company may also be imposed in a shareholder contract. In addition to assigning specific tasks and responsibilities to directors (provided that each shareholder appoints its own director), the shareholders` pact may also limit the decision-making powers of directors by requiring certain decisions to be approved by all shareholders. In this way, shareholders can decide in advance which decisions must always be approved by all shareholders, which can be particularly useful if the shares are issued in the future and the 50/50 division no longer applies. In addition to a Constitution, shareholders could sign a shareholder contract. The shareholders` pact is a private document and, contrary to the Constitution, it is not available to the public.
The shareholders` pact can therefore cover issues that shareholders do not wish to publish or which are thus adequately covered. It can take care of business before the creation of the company, while the Constitution regulates the company only after its creation.