9 Important Questions About Unanimous Shareholder Agreements

4. How can the USA affect Shareholder Governance?

A shareholder’s approach to the general governance of a company will typically depend on their particular circumstances (e.g. equal partner, angel investor, venture capitalist, institutional investor, etc.). For example, an equal partner in a company may want to exercise control over all decisions affecting a company, whereas, an angel investor may only want a say in major decisions, such as a merger with another company or sale of substantially all the assets of the company.

Quorum for board or shareholder meetings may not simply be based on the absolute number of directors or shareholders present at a meeting. It may include a requirement that a certain shareholder be present in order for any decisions to be made. In such a case, consider allowing a meeting to proceed with less than the usual quorum requirements after a certain number of adjournments of a meeting in case a particular director or shareholder fails to attend. This will prevent one party from stalling the business of the company simply by not attending board or shareholder meetings.

A USA might allow for amendments to the agreement by a specified majority of the shareholders. In order to prevent an agreement being amended by the majority without the knowledge of the minority, a USA should provide that all shareholders must agree to any amendment of the USA.

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