9. If the company reasonably finds that a proposed acquirer cannot be considered a shareholder in a company in Sub-Chapter S or that such a transfer would cause the Corporation to lose its corporate characterization of Sub-Chapter S, the company may inform the shareholder of that decision and, therefore, prohibit the closing of the assignment. However, there is nothing in this paragraph to interfere with the rights of the company and shareholders under this agreement. 2. When two or more existing companies that carry out their own operations contract a joint venture for specific purposes and use a business as a vehicle for the joint venture. An example could be where a supplier and distributor are needed to enter into a contract for a large project. You can create a joint venture to close the contract. They will want a shareholder pact that would set out their respective rights, obligations and responsibilities; A company`s shareholders` pact can be implemented at any time, but often when the relationship between shareholders and directors changes. The directors of the company may increase the salary of shareholders/employees from time to time, provided, however, that the remuneration paid to each shareholder or employee for his services in a calendar year is equal to the remuneration paid to any other shareholder in that calendar year, unless the shareholders have approved the remuneration unanimously or by written consent signed by all the directors of the company and have included it in the company`s minutes.
The MOI is the top ranking of the two documents. However, it is a public document, so some of the issues that shareholders want to govern more confidentially need to be addressed in the shareholders` pact. Any point of the shareholders` pact that is in conflict with the MOI is null and void and not entitled. It is therefore important that both documents be prepared simultaneously. This agreement expressly provides that the rights and obligations provided for are included, in addition to all rights and obligations, in the company`s statutes and in the 1973 Corporations Act. For those who start a business in South Africa, it is important to consider the benefits you need or not from a shareholder pact. Please note that the information below uses the term “shareholders` pact” in the general sense of the term, as it also applies to those who participate in a close corporation, the only change being that it is called a “member agreement.” As soon as two or more people decide to participate jointly in the transaction, the shareholders` pact should be the first document to prepare and sign. Often, this document is developed from the beginning or when companies are set up to discuss and finalize aspects of their relationship that might otherwise not have been covered. 6. (a) Where the company or the shareholders exercise, as part of this agreement, an option or right to exchange or buy shares of a shareholder, the purchase value is paid to the shareholder within thirty (30) days of notification to the shareholder concerned whose shares have been repaid or acquired in cash within thirty (30) days of notification to the shareholder concerned.