A shareholder agreement is a legal document that outlines the rights and obligations of shareholders in a company. It is a critical document that serves to govern the relationship between shareholders, the company and its directors, and outlines the shareholders’ rights and obligations.
In Cyprus, a shareholder agreement is a private contract that is legally binding on the parties that sign it. The Companies Law, Cap. 113, does not require a shareholder agreement for the establishment of a company. However, it is highly recommended to have one to prevent misunderstandings between the shareholders, the company, and the directors.
A shareholder agreement typically covers the following areas:
- Shareholders’ rights and obligations: This outlines the rights and obligations of the shareholders in the company. It includes matters such as the number of shares each shareholder holds, their voting rights, and how decisions are made.
- Management of the company: This section sets out the management structure of the company, including the appointment of directors, their powers and duties, and how decisions are made.
- Transfer of shares: This outlines the rules for transferring shares between shareholders, including any restrictions on transfer and the process for the transfer of shares.
- Minority rights: This section deals with the protection of the rights of minority shareholders. It outlines the procedures for calling general meetings, voting rights, and other measures to ensure that minority shareholders are not unfairly prejudiced.
- Confidentiality: This section ensures that confidential information about the company, its operations, and its shareholders is kept confidential.
- Dispute resolution: This outlines the procedures for resolving disputes between shareholders and the company. It can include arbitration or mediation clauses.
At Chambers & Co, we offer a range of services related to shareholder agreements. Our team of experienced lawyers can help you draft a comprehensive shareholder agreement that is tailored to your specific needs. We can advise you on the appropriate provisions to include in your agreement to protect your interests and ensure that your rights are adequately safeguarded.
We also offer services related to the review and analysis of existing shareholder agreements. We can help you identify any potential issues or areas of concern in your current agreement and provide advice on how to address them.
In addition, our law firm provides legal representation in disputes related to shareholder agreements. We can represent you in court or arbitration proceedings and work to protect your rights and interests.