Shareholders Agreement New Zealand
Disputes between partners can be bitter, tedious and costly to resolve. They can result in a significant loss of value in the business. The unfortunate consequences of shareholder conflicts can be avoided if shareholders take into account the questions that might arise between them from the outset, when relations between them are harmonious. Unfortunate consequences can also be avoided if shareholders have signed a shareholders` pact specifying how these issues are dealt with when they arise. A comprehensive shareholder agreement for an existing New Zealand company that also has external financing from a large lender such as a business angel or venture capitalist. 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). A shareholder pact is an essential document for business owners.
It will reassess control where there are different levels of participation and power in day-to-day decisions and protect the value and interests of each party. 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. Our proposal for service companies contains an important dispute resolution clause that can be included in this agreement if the parties deem it appropriate. This shareholders` pact was drawn up to contain the provisions that a large professional or institutional investor, such as a business angel, venture capital or private equity investor, would need to protect its New Zealand investments. The good news is that even if your business is already operational, it`s not too late to enter into a shareholder contract. As you can see in the Susan/Nancy situation, a shareholder pact can be invaluable for every company, regardless of size or industry. It doesn`t need to be complex and can be adapted to your company`s specific situation. It is just like those who enter a `pre-nup` relationship property, it can pay to set rules in advance. Regulation and business management in New Zealand are primarily governed by the 1993 Corporations Act. Some requirements of the Corporate Law are mandatory (for example. (b) the duty of directors to act in good faith in the interests of the company and not to act lightly).