This article posted on our partner site Mondaq.com discusses the importance of executing a unanimous shareholders’ agreement (USA) to deal with matters of particular significance to the shareholders of a corporation.
The USA should be drafted to address foreseeable issues (i.e., how directors will be appointed and removed from the board, how the business will be funded in the corporation’s early years, how the valuation of transferred shares will be determined) as well as provide flexibility for unforeseeable issues (i.e., through negotiated fair provisions). If shareholders wish to “entrench” certain rights and obligations, they should adopt a USA, which requires unanimous shareholder approval before it can be changed.
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