Shareholders' agreements

Summary

Shareholders’ agreements reflect a reassertion of contractualism in corporate law at a time when statutory regulation is more extensive than ever.  Though not displacing the s140 statutory contract between members, shareholder agreements have nowadays become highly popular, particularly in proprietary companies and in joint venture arrangements. They usually seek to formalise relations and understandings between shareholders on such key issues as involvement in management, the power balance including rights of founders and minorities, veto rights, buyout and succession rights, pre-emption rights on new share issues and dispute resolution.

Researcher

Project background and aims

This project aims to explore the relationship between shareholders’ agreements and the corporate constitution, particularly in relation to reconciling any conflict between the two. It also aims to analyse what role shareholder agreements have in setting reasonable expectations that may play a role in oppression actions or seeking a winding order up on the just and equitable basis. In that regard the extent to which the shareholders' agreement may provide a factual matrix of “what was in contemplation of the parties” when incorporating the entity will be analysed. The debated concept of “legitimate expectations” about the operations of the company will also be examined, including particularly, the expectation of participation in its management.

Methodology

The analyses will be doctrinal within the framework of both corporate law and contract law, including reconciling overlaps between the two.

Output