What proportions will the shareholders own the shares ?
Are different classes of shares with different rights necessary ?
Do you agree pre-emption rights for shareholders ?
Minority shareholder protection
Should the directors be able to block the transfer of shares ?
Are transfers of shares to be allowed between existing shareholders or to family members or to family trusts or to associated companies?
How regularly should directors meetings take place?
Where there may be a deadlock at board level will the chairman be given the casting vote ?
Will directors be employees and if so, will they need director’s service agreements
What is the policy on payment of dividends
Agreement regarding working capital, long term finance and loan capital
Will shareholders guarantee any company borrowings if required by banks or others ?
In what circumstances is the issue of new shares or introduction of new shareholders allowed ?
authority will be granted to or restricted for entering into major contracts, charging assets of the company or lending or giving security or financial accommodation ?
policies on appointments and dismissals of directors and remuneration for directors
the company’s bank mandate arrangements
Are non-competition covenants required for either directors or shareholders or both on departure ?
Are confidentiality clauses needed from directors or shareholders or both ?
clarification of time which will need to be devoted to the business by directors or shareholders
rights of shareholders to have access to management information and inspect books of the company at its premises.
events of breach of the agreement and consequences, such as physical incapacity or bankruptcy or in circumstances where a shareholder ceases to be a director/employee
agreements as to what happens on the death of a shareholder.
an agreed basis for valuing shares on departure of a shareholder
Should owners be required to have life, keyman and/or critical illness insurance ?
Deadlock provisions where there is a 50/50 ownership situation.
Consideration of “drag along” rights for shareholders who have a controlling interest in the company the ability to force minority shareholders to join into a sale. Similarly “tag along” rights would enable shareholders to join with other shareholders who intend to sell to a third party.
