A well-drafted shareholders’ agreement should clearly articulate the roles, responsibilities, and decision-making abilities of a Company’s shareholders, directors and management. Of particular importance for good governance - a clear statement of those decisions which cannot be taken without a specified level of support (Reserved Matters provisions). These outline the boundaries for management’s discretion, director supervision and shareholder control.
Typically, Reserved Matters lists include: transactions above a certain threshold; or of an unusual nature; changes to business plans, and key personnel remuneration.
Reserved Matters promote transparency and cooperation and strengthen the foundations for a company’s long-term stability and growth.
Questions?
Require assistance navigating a complex shareholders’ agreement? Want to explore your options? Something else? Contact our expert team.
Chris Lee, Director, K3 Legal - Chris@k3.co.nz.
This article is part of our series "Shareholder’s Agreements: Your Business Toolkit", providing practical insights to fortify your business foundations.
Read Part 2
