For the purposes of Article 15(7) of the Law, the shareholders of a company may conclude any agreement on all matters related to the company (including a shareholders` agreement), provided that such agreement is compatible with the law and the company`s MOI. We have on this site a shareholder contract for private companies for sale. Learn more here. In summary, the MOI usually leads the long-term structure of the company, while the shareholders` agreement is a document that can be updated immediately by the different phases of the company`s growth. The Memorandum of Incorporation («MOI») is the founding document of the company which, in conjunction with the Companies Act, 2008 (Act No. 71 of 2008) («Act»), governs the management and affairs of a company. It sets out the rights, obligations and responsibilities of shareholders, directors and others, within and with respect to a company, as well as other matters dealt with in section 15 of the Act. You may not use this agreement if you have used the CIPC MOI short form to set up your private SMME business. Learn more here.
We create an individual shareholders` agreement tailored to your individual participation requirements. -The default position for the start of a board meeting is that a majority of directors must be present. This may be acceptable to shareholders, but we can raise this threshold or add that a particular director must be present if necessary; Please note that I do not dispute that there are other agreements that can be largely standardized and optimized by non-lawyers. However, I hate to classify the shareholders` agreement and the MOI in the «standard» category; legal agreements/documents; Also beware of apparently tailor-made shareholder agreements, generated automatically, which do not respond to what is included in the MOI and which do not advise what happens to the MOI so that companies do not get caught with «their (corporate) pants». There are also differences in how documents bind new shareholders. The MOI automatically binds new shareholders without their explicit consent, while a shareholders` agreement must be concluded before it is binding. A MOI clause in the shareholders` agreement simply does not work. The new Equity Act has about 52 default clauses that can be amended.
However, only the MOI can amend the amendable provisions of the new Actions Act. It is not mandatory for a company to have a shareholders` agreement. However, given that this is a private document and has not been filed with CPIC, it is useful to conclude whether there are any truly confidential matters on which shareholders and the company wish to agree. In our experience, there are rarely terms that are truly private or confidential and, as such, there is little need to have a shareholders` agreement in addition to the mandatory MOI. Buy & Sell contracts are concluded when shareholders take out insurance on the life or disability of another shareholder, so that after the death or obstruction of the other shareholder, the first shareholder is paid by the policy to be able to afford to buy the shares of that other shareholder. . . .