It could be a collapse in the shareholder relationship or in the unfortunate bankruptcy or even in the death of a shareholder. Many companies find themselves in vulnerable situations because shareholders have not given enough thought to what could go wrong. A shareholder contract is a binding contract concluded between the shareholders of a company in order to define their respective rights and rights and to organize the management of the company. Non-competition rules are often in shareholder agreements. By clarifying when and how a shareholder may engage in concurrent activities during and after having been a shareholder of the corporation, it removes any ambiguity that may result from the absence of explicit restrictions. The reason for the external activities of the controlling shareholders is that the main knowledge of the intellectual property or management system of the company, which are essential elements to maintain the lead of the company, must remain confidential, regardless of the comings and goings of the shareholders. The shareholders` agreement should state loud and clear the backs and donations, including the extent and duration of these restrictions. It is essential that the shareholders` agreement controls a non-competition clause or that it does not make sense to cry over the buried milk if a shareholder exploits the loophole and reveals the company`s business secrets. Note, however, that non-competitions must be appropriate to ensure their enforceability. If they are excessively restrictive or too broad, the court may decide that such a clause does not affect the shareholder.
In Nordic Law`s previous talk, we presented three key themes that should be taken into account when the founders of a startup design a shareholders` agreement (SHA). It completes the articles of association of the company. Some mandatory provisions must be included in the agreement, but the rest is up to the shareholders of the company to decide according to their personal and sectoral objectives. Grant of License. upon expiration or termination of this Agreement, [PARTY A] [PART B] grants an irrevocable, fully paid-up, non-paying, worldwide, non-exclusive license, with the right of sublicense, patents, copyrights or other intellectual property rights related to a [PARTY B-Developed Intellectual Property], including the right to exercise the [PARTY B-Developed Intellectual Property], and the right to produce products and processes; used, imported, offered for sale and sold under the [PARTY B-Developed Intellectual Property]. [PART B] Developed intellectual property. Any intellectual property developed exclusively by [PARTY B] in connection with its work on [DELIVERABLE] without the participation of the other party is and remains the exclusive and exclusive property of [PARTY B] (“[PARTY B]-Developed Intellectual Property”). These are a number of highly valued mechanisms that are sought after by shareholders and are generally included in most shareholder agreements. These clauses are intended to protect existing shareholders against the involuntary dilution of their stake in the company. Any new issue of shares (preferential subscription right) or shareholder shares (right of pre-emption) must first be offered to existing shareholders before they can be sold to third parties.
These rights are usually proportional, although in some cases the parties may agree to a “super pre-reception”, meaning that some shareholders may be allowed to invest more than proportionately. In the absence of these important safeguards, existing shareholders will eventually have a small piece to become a bigger cake. This is clearly unfavourable to the founders, which is why we strongly recommend that these rights be recorded in writing. Retain ownership of existing intellectual property. With the exception of the rights granted in the licensing of this Agreement, each Party retains all interest and ownership of its intellectual property that existed prior to this Agreement or that has been developed outside the scope of this Agreement. . . .