!-- Google tag (gtag.js) -->

Block "after-header-main" not found

Shareholders Agreement Classes of Shares

When starting a business, a shareholders agreement is crucial to specify the relationship between shareholders and establish the rights and obligations of each party. One essential aspect of this agreement is the classification of shares.

Classes of shares refer to the different types of shares issued by a company, each with distinct rights and restrictions. The most common classes of shares are:

1. Ordinary shares: These are the most common type of shares and represent ownership in the company. Ordinary shareholders usually have voting rights and the right to receive dividends.

2. Preference shares: These shares are so-called because they have preferential treatment over ordinary shares. Preference shareholders have the right to receive dividends before ordinary shareholders and, in the case of liquidation, are paid out before ordinary shareholders.

3. Redeemable shares: These shares can be bought back by the company at a predetermined price and date. Redeemable shares are a way for the company to raise capital without diluting its ownership.

4. Non-voting shares: These shares do not carry voting rights but still entitle the holder to any dividends allocated to them.

5. Founders` shares: These are a special class of shares given to the founders of the company, usually with reduced or no voting rights. Founders` shares are often used to retain control of the company while still issuing equity to investors.

It`s crucial to define the classes of shares in a shareholders agreement to avoid confusion and prevent disputes between shareholders. The agreement should specify the number of shares issued in each class, the rights and restrictions of each class, and any conditions for issuing new shares or transferring ownership.

In conclusion, when drafting a shareholders agreement, it`s essential to consider the classes of shares and their respective rights and restrictions. Defining these classes in the agreement will protect both the company and its shareholders in the long run.

This entry was posted in Chưa phân loại. Bookmark the permalink.