How do existing shareholders regulate the entry of new shareholders into the company? Such restrictions are usually granted in the form of a right of pre-emption in favour of other existing shareholders or in the form of powers of the board of directors to refuse registration of the transfer of shares. Where shareholders have entered into a SHA, the courts will generally give it priority, as the SHA indicates the purpose of the parties` intentions as to the nature of their relationship. Without one, it can be more difficult to find a legal basis for a claim, as the articles of association (now called the Constitution) may not provide sufficient protection for society. Pre-emption rights – A prerequisite for a shareholder to offer other shareholders of the company the right (but not an obligation) to acquire the shares prior to the sale or transfer of shares to third parties. Shareholders` agreement in Malaysia Lawyers` advice – Do the shareholders of a Malaysian company need a shareholders` agreement? What is a partner`s contract? A shareholders` agreement is a document in which several shareholders of a company participate and describes the results and specific measures taken in the event of the departure of a shareholder from the company, whether voluntarily, involuntarily or if the company terminates trading. This is especially true if you are a minority shareholder of the company. While the Companies Act 2016 provides some form of protection for shareholders (e.g.B derivative measures or oppression of minorities), these can lead to lengthy and costly litigation for all parties involved. Shareholder agreements are both daily and can very well serve to safeguard the interests of all shareholders involved, especially minority shareholders. Even if a company has not entered into a shareholders` agreement, nothing is opposed to the shareholders to meet one a posteriori. While it is technically possible to create your own shareholder agreement (especially if you know exactly what you want from it), we strongly advise you to consult a lawyer or legal advisor to advise you on the potential effects of a shareholders` agreement. 1.19 «this Agreement», «here», «here», «below», «below», «below» and similar expressions refer to this Agreement and not to any section, subsection, paragraph or other part of this Agreement. In the event that a nominee does not vote for the board of directors of one of the shareholders and acts as a director to execute the provisions of this Agreement, the shareholders agree to exercise their right as shareholders of the company and, in accordance with the articles of association of the company, to remove that nominee from the board of directors and to choose a person in his place or place, who has made his best efforts to execute the provisions of this agreement, but only in the event that the shareholder whose nominee has been removed has not appointed a successor within fourteen days from the date on which that nominee was withdrawn. PandaTip: This section ensures that shareholders have the same expectations about when they can get money from the company and ensure that distributions do not compromise the company`s financial needs.

PandaTip: This can be a frequent topic of controversy among shareholders, each thinking that the other is not working hard enough, that he is overpaid, etc. The use of detailed employment contracts or the placement of these conditions can help mitigate future disputes. Nevertheless, minority shareholders should also insist on the right to appoint at least 1 director of the company – even though you may not have control of the company at the management level, your representative on the board of directors would allow you to easily monitor the company`s activities and preserve your rights as a minority shareholder…