What exactly can be included in a shareholders` agreement? In this context, it would be possible to make changes to the AA by a special decision in accordance with S 12 (1) CAP 113 or by adopting the Common Law Duomatic principle of unanimous shareholder agreement. In addition, it was found that the principle of non-compliance with a SHA applies, as was the case in Monecor (London) Ltd v Euro Brokers Holdings  EWCA Civ 105, which stated that a unanimous informal agreement would be effective in amending the procedures set out in a SHA. Thus, if the members accepted the validity of a notification by e-mail, a requirement of formal notice from the board of directors in the event of a recall of capital was nevertheless satisfied by alternative procedural means. A shareholder contract (SHA) is a private contract between the members of the company that contains, among other things, the rules relating to the management and ownership of the company. A SHA rules out this relationship and sets the basics in case of a blockage. It is important that shareholders take a SHA before or after the creation of the company in order to become aware of their rights and obligations among themselves. SHA acts as protection and offers shareholders more protection and comfort. The case in question concerned an SHA between four shareholders and their company, which provides, inter alia, that “in the company, no other share capital may be created or issued…… without the written consent of each of the parties thereon”. The Court of First Instance decided that although such a contract was not valid vis-à-vis the company (Shirlaw), it was nevertheless regarded as a private agreement vis-à-vis the members. In a way, the company`s business was considered “independent and separable from that of the partners”, so that it was now perceived as a purely personal contract between the members alone. It is therefore not a henfessel in the exercise of the legal powers of the company.
If, in the context of the foregoing, such a conflict were to arise in the provisions of both documents, the question of amending the AA would inevitably arise. Essentially, priority (which provides that the SHA takes precedence in the event of inconsistency) would effectively constitute an amendment to the AA. Such an amendment would activate the requirements of the Companies Act S 12 (1) (CAP 113), which confers a legal power to amend the AA by adopting a special decision on the matter and then filing it (within 15 days) with the Registrar of Companies in accordance with S 137 CAP 113. In order to take into account the “modification” implications of a possible implementation of the priority and to maintain the limits of CAP 113, it would be desirable for the parties to the SKH to ensure that they embody a contractual obligation, that they will use their respective voting rights as shareholders to correct the employment company accordingly – and the relevant “offensive” provision AA, which is in contradiction with the SHA to eliminate it formally. When will the partner contract be drawn up? The preparation of a shareholder agreement should be carried out by an experienced trustee who is able to provide appropriate advice and support tailored to the specific facts of the case concerned. This is what we try to offer at Vasiliou Law. . . .