Industry: Business Legal topic: Business setup Description of legal work: I had a draft shareholders agreement completed by another freelancer on this site but she let me down and did not finish the project. I need someone to incorporate my feedback into the draft agreement. Draft agreement attached. Feedback to incorporate below: 1. Can we protect ourselves in event of divorce. I.e. if a judge awards half of someones shares to their partner in a divorce we can force their sale 2. Can we trigger a sale in the event of bankruptcy to prevent the shares being handled by an administrator? 3. Majority: do we need to define this as a majority by voting rights rather than humber of people? 4. Can the transfer of shares on death also apply in critical illness. I.e. if someone is unable to return to work then we could trigger the sale of the shares? 1. This might cover the above but it would be good to cover long term absenteeism. i.e. if you go awol for 12 months we can trigger a sale 5. In the drag and tag rights remove the word Majority - I want this to apply for all shareholders 6. In 8.1 the non-compete restriction is solely stealing customers and employees, we do not mind if people work in the same industry. This is probably unenforceable anyway. 7. Can the pre-emption rights also apply to the sale of shares not just the issuance of new shares? I.e. if someone finds a buyer of their shares at £100 a share the rest of there shareholders can opt to buy them off him in the same proportion as their existing shares. Or the company can buy them back if profits allow. 8. In Part two remove this clause: "Become resident for tax purposes, or establish a permanent establishment, in a jurisdiction other than the United Kingdom.” 9. On the list of things directors need shareholder approval on please add: 1. Employing a family member or friend 2. Employing anyone on an above market rate salary or increasing anyones salary to above market rate 10. We would like to build in a remedy for gross misconduct by a shareholder that will trigger a sale 11. There must be 90% shareholder agreement for the issuance of new shares 12. If the buy back is trigger by an adverse event (i.e. misconduct) then we get three years to make the payments, not one. 13. The shareholders have the right to receive regular MI reports (monthly) to include: 1. Pipeline 2. Projections 3. Cashflow 4. Detailed Balance sheet 5. Detailed P&L 6. Payroll Extra notes:
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