The role of the clause in the Constitution was to protect the interests of holders of certain classes of shares when a share issue is contemplated; A shareholders` pact therefore determines which decisions cannot be taken without a decision: the shareholders` pact stipulated that all new share issues had to be approved by a simple majority of shareholders. It can be the most effective and cost-effective to rely on interchangeable rules or a constitution model and to set only specific rules in a shareholder contract. The Constitution is the guiding document of each company. Legally, the Constitution automatically binds the company and its members (Section 31 Companies Act, 2014), although members are bound by the statutes only as shareholders and not as other members. Although incorporation models may be adopted in diagrams 1, 7 and 8 of the act, you will very often find in practice that the creation of a business is designed by a business creation officer, accountant or lawyer who will adopt certain parts of these models with certain modifications/exclusions. Constitutional rights and obligations must be taken into account when assessing the company`s participation, as they are part of the member`s interest in the company as represented by its share. On the other hand, the rights and obligations arising from a shareholder contract are closer to a « burden » of interest or a separate « collateral agreement » with its own value. I have outlined the most common categories of situations where shareholder agreements are used, although there are of course many variations. For the purposes of this document, I propose to focus on the most common questions that would arise if two or more people wished to include a shareholder pact in an early store. Another situation that is usual is that an investor (whether it is a venture capitalist or otherwise) wants to invest in the company. The considerations in such a situation are somewhat different and are not addressed in this document.
It is also customary to note that certain classes of share transfers are exempt from the obligation to offer them to other shareholders. This is sometimes the transfer of shares to family members or a family foundation or the transfer of shares by an associate to another member of his group or the transfer of shares to his personal representatives or successors after the death of a shareholder. In addition, it is customary to find a provision allowing the waiver/non-application of these pre-emption rights with the agreement of all or part of the shareholders.