Legal Advice on Shareholder Agreement

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The aspect of Legal Advice on Shareholder Agreement is known to be among the most important documents that can be privately owned by a company. One of the important aspects involved in processing a Shareholder Agreement is known to be resolving of disputes between shareholders. The main purpose of a shareholder agreement is to ensure clarity for the shareholders and their peace of mind as well to make sure that there shares won’t go for a loss in case of liquidation of the company.

The aspect of legal advice in case of agreements between shareholders mostly arises when a company is growing in leaps and bounds as with growth the number of shareholders in the company also goes up. Without a shareholders agreement any dispute regarding responsibilities and debts can actually create more disputes among the shareholders and this can in turn tear apart the main administrative body or the management of a company.

The field of Legal Advice on Shareholder Agreement actually prevents the falling apart of a company as the legal field ensures to safeguard the interests of the shareholders in a company on the whole. The legal advices provide easy and fast solutions to the aspects of disputes between the shareholders in a company and also ensures the distribution of responsibilities between the shareholders on the basis of the amount or percentage of shares each one of them have in their names. One of the major aspects to be considered while dealing with legal aspects in shareholders agreements is the death or divorce of a major shareholder according to which the shares either get distributed among the remaining share holders or the family of the deceased share holder can claim the shares and a shareholders agreement can prevent this by giving the other shareholders a say of refusal in the act of purchasing the shares of the deceased shareholder. In case of divorce of a shareholder the legal department forming the agreement can prevent the former spouse from creating any problems with the share transactions.

Shareholder agreement that’s legally formulated can also prevent the shareholders from selling their shares to any body and the legal advice on shareholder agreement makes the other share holders aware about their rights to prevent the misuse of the shares by any particular share holder. In case the fellow shareholders without proper legal backing enter into contracts with any other agency may turn out to be harmful for the company on the whole. The aspect of Legal Advice on Shareholder Agreement is known to decide whether a shareholder is competent enough or how to deal with his assets in case he goes bankrupt. The legal department also decides about the appointment of a trustee to ensure the benefits of the creditors for the shares of the corporation. The shareholders whose shares have been affected will have to send a notice to the rest of the share holders and the operation of the shares will depend on the giving of a notice period or no notice until then the corporation has the right to operate the shares and deal in buying and selling of the shares and if there is any share that’s remaining then the shareholders are entitled to have those shares to their names within a time period of 15 days. The other share holders can also purchase the shares of the giver and divide them among themselves also known as Proportionate Share.

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