Shareholders Agreement Minority Protection

Automatic transfers are usually triggered when a shareholder dies; is convicted of a crime; dissolved or liquidated (if the shareholder is a corporation); declaration of insolvency; has terminated its employment relationship with the company (if the shareholder is also an employee); substantially violates the SHA; significantly violates other above-mentioned ancillary agreements that could harm the company; or, among other things, a breach of an obligation to the company. Shareholders can determine which acts or omissions trigger an automatic transfer and, as long as the SHA is clearly defined, they are binding. It could be a collapse in the shareholder relationship or in the unfortunate bankruptcy or even in the death of a shareholder. Many companies find themselves in vulnerable situations because shareholders have not given enough thought to what could go wrong.

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