Commentary

108.2 Default provisions in the shareholders’ agreement

BUSINESSES vol 4(2) start-up, sale and purchase
| Commentary

108.2 Default provisions in the shareholders’ agreement

| Commentary

108.2 Default provisions in the shareholders’ agreement

The usual way to reflect the distribution policy in the shareholders’ agreement is to embody the parties’ agreement on this matter in a default provision1. This leaves the parties free to agree to a different basis for distributing profits should they so wish. The contract should make it clear that any agreement to deviate from the approach in the default provision must be made by unanimous consent2.

In many cases, the shareholders will be content to wait until the end of the accounting period before receiving their share of

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