Recent Answers to Shareholders Agreement Law Questions

David W.

Answered Dec 6, 2024

Yes, a minority shareholder can be compelled to sell their shares under certain conditions outlined in a shareholder agreement. These agreements often include provisions that address scenarios in which a minority shareholder might be required to sell their shares. Some of these key provisions include Drag-Along Rights and Buy-Sell Agreements.

Thomas L.

Answered Aug 15, 2023

A shareholders' agreement generally provides specified outcomes on issues that require a stockholder vote. Thus, who is on the board of directors, the sale of the company, and other major issues like that. The agreement requires that the stockholders vote in the agreed upon manner to enforce the agreement.

Thomas L.

Answered Jul 21, 2023

Shareholders have rights and powers under the corporate law of the jurisdiction in which the company is incorporated. But many stockholders, especially in private companies, demand additional powers and protections.

Daniel D.

Answered Jul 18, 2023

The shareholder agreement should specify your ownership rights and the policy on dividends. Or, the LLC Operating Agreement or Corporate By Laws could state when, to who and how frequent dividends are given out. Without seeing the shareholder agreement it is difficult to say what your rights will be and how the dividends will be paid out as each small business is unique.

Paul S.

Answered Jun 23, 2023

There are cap table management companies such as Carta and Pulley, that can help with this (for a fee). As long as your company has only issued common stock, maintaining a cap table and stock ledger in Excel is more than adequate. I also recommend storing PDFs of the stock purchase agreements in a cloud-based folder labeled "Stock Purchase Agreements." In terms of officer roles, the corporation's Secretary is responsible for maintaining these shareholder records.

Ben P.

Answered Jun 13, 2023

The answer to your question will largely depend on the specific terms of the Shareholders Agreement, and whether the claims, and potential liability, come from a third party, the corporation itself, or your fellow shareholders. It might also depend on any other role(s) you have with the corporation as a director, officer, employee, and/or agent. A Kansas statute (K.S.A. 17-6305) provides specific parameters regarding a corporation's basic indemnity obligations for its directors, officers, employees, or agents. However, a shareholders agreement, the articles of incorporation, and/or bylaws might provide for more details regarding an indemnification review and approval process, the advancement of fees, or other requirements or protections. Related to indemnification by the corporation itself, the existence and extent of any insurance coverage for directors and officers liability (a D&O policy) could be a vital consideration in certain situations. You should consult with an experienced attorney regarding the specific terms of your Shareholders Agreement, any other relevant corporate documents, and the particular concerns you might have to make sure you fully understand the extent of any protection provided, and whether there are any uncertain areas or issues that need to be addressed.