The process when a shareholder wishes to sell or transfer their shares in the company. Percentage dilution occurs when an existing shareholder does not acquire the number of newly issued shares needed to maintain its current proportionate ownership (for example. B if a shareholder currently owns 10% of the shares in a company, he must acquire 10% of the newly issued shares to retain his relative ownership). Many entrepreneurs who create startups will want to design a shareholders` agreement for the first parties. This should clarify the original intentions of the parties; In the event of a dispute, as the company matures and changes, a written agreement can help resolve the issues by serving as a point of reference. Entrepreneurs may also want to include who can be a shareholder, which happens when a shareholder is no longer able to actively own their shares (e.g.B. is disabled, dies, resigns or is dismissed) and who has the right to be a member of the board of directors. A shareholder loan is usually a form of financing through the debt provided by the shareholders. These are usually the most promising debt securities issued by a company.
Since it is subordinated to other priority loans, other more «priority» creditors therefore have priority rights over the repayment of the debt owed by the company. Shareholder loans can also have long maturities with low or deferred interest payments. Shareholder loans can also be converted into [a class] of shares. This method of financing is typical of young companies that are not able to take on debts with banks. For greater clarity, a shotgun clause requires a shareholder to submit an offer to another shareholder, which, in turn, triggers reciprocal purchase or sale rights. A put and call option indicates a price or a clear way to determine a price, while a shotgun clause allows the supplier to set a price. In addition, an option must have a clear exercise trigger, whether it is a date or an event, while a shotgun clause can only be invoked by an offer to buy or sell. A shareholders` agreement includes a date, often the number of shares issued, a capitalization table (or «cap»), which indicates the shareholders and their percentage of ownership, any restrictions on the transfer of shares, the subscription rights of current shareholders to purchase shares (in the event of a new issue to maintain their ownership share) and details of payments in the event of the sale of a business. The purpose of this briefing is to guide you in your conversations if you are considering a joint venture between new shareholders of a company. However, at some point, you will need to hire lawyers to help you develop the final agreement. Either way, I hope these sixteen main balls can help you be better prepared and save some legal fees.
These restrictions may be regulated in the shareholders` contract and/or in the articles of association of the company. In order to address these restrictions and to use these arguments with third parties, they should be included in the company`s articles of association. It is also good practice to include such rules and/or references to sha provisions in a legend of the share certificate, in order to prove and ensure that future buyers are informed of the restrictions. However, since some restrictions may not be fully reflected in the articles of association, the parties must always ensure, before signing a shareholders` agreement, that their provisions are applicable in practice and comply with the provisions of the applicable law, in particular the Turkish Commercial Code. Make sure you know how a new investor will enter the business by entering into a convertible loan, SPA (share sale agreement) or in some other way that will come to the mind of shareholders….