Shareholders in a corporation might enter into a shareholder voting agreement for a variety of reasons but the two primary reasons are:
- restrictions on the transfer of shares to an outsider
- restrictions on decisions a single shareholder can make that effect the finances of the company
Here is some sample language to help guide you in drafting your shareholder voting agreement.
A NOTE ABOUT VOTING RESTRICTIONS AND MANAGEMENT
When we’re talking about voting restrictions we’re basically setting forth the types of decisions that require majority vote and the types of decisions that require less than unanimous vote like majority vote or super-majority vote.
A NOTE ABOUT TRANSFER RESTRICTIONS
A Tag Along Clause gives a minority shareholder a right to sell its shares on the same terms as the majority shareholders in the event the majority shareholders sell their shares. In short, the minority shareholders have the right to “tag along” with the sale of the majority shareholders’ shares.
A Drag Along Clause gives the majority shareholders the right to force the minority shareholders to sell their shares in the event the majority shareholders seek to sell their shares. In short, the majority shareholders have the right to “drag” the minority shareholders into a sale of shares.
Shareholder’s Voting Agreement w Optional Provisions
Consultation with an attorney is always recommended before you use or modify these sample provisions.
