Commentary

110.1 Restrictions which should be accepted by the shareholders alone

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

110.1 Restrictions which should be accepted by the shareholders alone

| Commentary

110 Drafting restrictions in a shareholders’ agreement

Where the company is to be a party to the shareholders’ agreement, great care should be taken to ensure that it does not agree to any restriction which might be interpreted as a fetter on the company’s powers under the Companies Act 20061. In the following paragraphs the restrictions which should only be agreed between the shareholders inter se are discussed, followed by those restrictions which may be imposed upon shareholders and company alike.

110.1 Restrictions which should be accepted by the shareholders alone

The case of Russell v Northern Bank1 made it clear that

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