Shareholders Agreements For Your Company’s American Subsidiary 

Shareholders' agreements are not legally required in the United States, but they are commonly used by companies to govern the relationship between shareholders, set out their rights and responsibilities, and provide a framework for decision-making and dispute resolution. At Atom Law Group, we recommend them when there is more than one owner. You must carefully consider whether your US subsidiary will be owned by your company or whether it will be owned by the shareholders of the company. There are advantages and disadvantages to consider.

A Shareholders' Agreement Typically Includes the Following Key Terms:

  • Ownership and Voting Rights: The agreement sets out the rights and responsibilities of the shareholders, including their ownership stakes, voting rights, and right to participate in management decisions.
  • Transfer of shares: The agreement may include provisions on the transfer of shares, including restrictions on the transferability of shares, pre-emptive rights, and right of first refusal.
  • Capital Contributions: The agreement may require shareholders to make capital contributions or provide for the issuance of new shares.
  • Dividends: The agreement may set out the rules for the distribution of dividends, including the timing and the percentage of dividends paid to shareholders.
  • Deadlock Resolution: The agreement may include provisions for resolving disputes among shareholders, such as the appointment of a neutral third party or the buy-out of a minority shareholder.
  • Shareholder obligations: The agreement may set out the obligations of shareholders, such as maintaining confidentiality, not competing with the company, and not soliciting customers or employees away from the company.
  • Board of Directors: The agreement may set out the composition, responsibilities, and decision-making authority of the Board of directors.
  • Buy-Sell provisions: The agreement may include a buy-sell provision, which allows the company or remaining shareholders to purchase the shares of a shareholder who wishes to sell or leave the company.

It's important to note that shareholders' agreements are legally binding and enforceable, but they are private agreements among shareholders and not filed with any government agency. They can be used to supplement a company's bylaws and can help clarify the rights and responsibilities of shareholders. Contact us today for an appointment with our firm's Turkish-speaking managing partner, Togai Atac, to determine whether you should have a shareholders' agreement for your US subsidiary and to determine what the ownership structure of the entity should be.

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