Q&As

Is a shareholders’ agreement binding on shareholders who have failed to execute a deed of adherence or otherwise sign the shareholders’ agreement?

read titleRead full title
Published on LexisPSL on 09/07/2019

The following Corporate Q&A provides comprehensive and up to date legal information covering:

  • Is a shareholders’ agreement binding on shareholders who have failed to execute a deed of adherence or otherwise sign the shareholders’ agreement?

A shareholders’ agreement is no different from any other form of contract and so can become binding on shareholders because it has been agreed to by all of them either orally, in writing (but not formally signed) or by conduct. See Q&A: What is the effect if one party fails to execute a multi-party agreement after the others have executed. Will this bind only the parties executing?

If the agreement has been signed by some, but not all the shareholders, the first question will be why. If they did not sign because they did not agree with the agreement or the agreement was only to come into effect if signed, then that is likely to be an end of the matter.

However, if they did not sign for some other reason, such as oversight or because they did not think it was necessary, then the position may well be otherwise. If it is clear that the parties have agreed the terms of the shareho

Popular documents