Chinese Shareholders Agreement Template (C107)

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This document comes in two versions – English and Chinese.
It is between two individuals who set up a limited company to run a new business in which each of them has 50% of the shares.
The agreement contains 18 clauses covering
  • interpretation
  • business of the company
  • capital
  • profits policy
  • directors, chairman, secretary
  • meetings
  • day to day conduct of company’s business
  • bank account
  • accountants and registered office
  • matters requiring the consent of both shareholders
  • shares
  • exercise of voting rights
  • non-competition
  • default
  • deadlock procedure
  • death
  • language, law & resolution of disputes
  • a general clause detailing partnership, assignment, notices and ambiguity

C107 -股东协议(中英双语)

两人为经营一项新业务共同成立有限公司,每人持有50%的股份。
本协议涵盖公司业务性质、最初股权资本、利润政策、董事会详情,会议安排、日常工作、银行帐号、审计员等等。同时还规定了需要双方同意才能处理的事情。如果双方意见不一致,发生争执,设有处理违约、僵局的条款规定。

This basic Agreement is designed for use between two individuals who decide to form a limited company for a new business venture in which each of them will own 50% of the shares. The agreement assumes that the company to be formed will be incorporated in England. If the company is formed in another country, some of the wording may not be appropriate and changes may be needed.

Note: There are quite a few details to be inserted in the text and many of these are identified by square brackets [  ]. While all the wording should be checked for suitability, wording in square brackets is optional/variable and the square brackets should be removed before the agreement is finalised.

The Agreement, after a short clause defining certain terms, sets out the principal objectives of the business and the initial share capital to be contributed by each of the parties in Clause 3.

So far as share capital is concerned, advice from accountants as well as lawyers may be appropriate: for example, if initial capital of £10,000 is required, it might be advantageous to have only £1,000 as share capital with the remaining £9,000 contributed by way of loans from the Shareholders to the Company.  If such an approach is adopted, then the wording would need to be changed to accommodate this.   Terms upon which the loans would be repayable and the interest, if any, it would earn, would also need to be specified in the Agreement.

Clauses 3.3 and 3.4 deal with additional capital and 3.5 makes it clear that if any guarantees are required from the Shareholders, they should be provided pro rata – i.e. each of them will guarantee 50% of the liability.  Bear in mind, however, that the third party bank or other lender requiring the guarantee may want the right to pursue either guarantor for 100% of the debt (“Joint and Several Liability” as it is referred to in legal documents).  Careful negotiation and legal advice is going to be required in such circumstances.

Clause 4 sets out the profits policy – namely a commercial approach with a view to maximising distributable profits.

Clause 5 deals with the appointment of officers – the Directors and Company Secretary.  Where there are two individual Shareholders, the most likely scenario is that each of them will be a Director and one of them will become Chairman, probably without a casting vote.  Sometimes Shareholders agree to the Chairmanship being rotated. Alternatively the Shareholders may decide not to have a chairman, in which case the clauses referring to the chairman can be removed. The Company Secretary can be one of the Directors, but it may be an accountant or solicitor or some other third party suitably qualified.

Clause 6 deals with the arrangements for meetings of the Directors.  The most important provision here is 6.4.  What happens when the Directors do not agree on a particular course of action?  One solution is to give the Chairman a casting vote but that is unlikely to be acceptable with two equal Shareholders.  If there is a real disagreement, what is termed a “Deadlock”, then the procedures in Clause 15 may have to be operated if this clause is included.  At the end of the day, if the Shareholders in a company such as this cannot reach agreement, the only solution is either for one to buy out the other or for the Company to be wound up.  Hopefully that will not happen but the risks need to be considered.  That is one reason for having a Shareholders Agreement, so that there is a procedure for dealing with difficulties should they arise.

Clause 7 deals with routine day to day management.  If one of the Shareholders/Directors is to be running the business then this would need to be covered here.  Similarly, if the two Directors have already agreed on some third party to act as manager, that can be recorded accordingly.

Clauses 7.2 and 7.3 deal with some financial issues – it is sensible to resolve such matters before the Company is set up rather than fall into a deadlock at the first meeting of the Directors.

Clause 8.  It is usual to name the Company’s bank in the Shareholders Agreement and the arrangements for signing cheques.

Clause 9 deals with formal matters, namely the appointment of accountants and the address of the registered office – i.e. the official address – of the Company.  This is frequently the address of the solicitors or accountants who are involved in setting up the Company.  On the other hand, it could be where the head office in reality is or perhaps the home of one of the Shareholders, if it is a small operation.

Clause 10 lists matters which require the consent of both Shareholders and the clause is so drafted that it should cover not only decisions at Shareholder meetings, but also decisions of the Shareholders or their nominees acting as Directors. Where each Shareholder has 50% of the shares and they are the only two Directors, the consent of both of them is required in any event before any decision can be made – unless the chairman has a casting vote. The precise list of items in this clause is obviously a matter for agreement.  As drafted, the list covers some of the more important financial commitments that a company might consider entering into.

Clause 11 is designed to prevent a Shareholder from allowing any third party to acquire an interest in the Company without the other Shareholder’s consent.  There is an exception in 11.2 for a family company but this needs to be handled with some care and certainly with legal advice, otherwise the family company might, itself, be sold on and the other Shareholder may find himself with a partner that he never contemplated and did not want.

Clause 12 is designed to reinforce the other provisions of the Agreement and to make sure that the Shareholders act in an honest and fair way towards one another and towards the Company.

Clause 13 restricts the Shareholders from having an interest in a competing business.  Whether or not this is appropriate will depend upon the circumstances.

Clause 14 deals with the situation whether one of the Shareholders become bankrupt or commits some serious breach of the Agreement – the solution being that the other Shareholder can buy him/her out at a price fixed by the accountants.  Sometimes Shareholders wish to specify the way in which the share price should be calculated, in which case the method of calculation would need to be spelled out in the Agreement.

Clause 15 deals with the procedure if there is a serious deadlock between the Shareholders on the way in which the business should be run.  In essence it is a three stage process.  Fist of all, the deadlock is identified and a statement is issued by one Shareholder to the other stating his/her position.  Clause 15.3 allows the matter to be referred to mediation if both Shareholders agree.  If this fails and the business is effectively paralysed, then the solution is for one of the Shareholders to give notice either to buy the other’s shares or to sell his/her shares to that other Shareholder at a fair price which will be fixed by the accountants if not agreed.  If that procedure is objected to, then both Shareholders are obliged to call a meeting and wind up the Company.

The remaining clauses are of a relatively routine nature – with the possible exception of 17.3 which deals with the possibility of one Shareholder dying; the survivor has the right to buy out the deceased Shareholder’s shares at a price fixed by the accountants.

Clause 18 contains choices with regard to language, law and resolution of disputes.  As this agreement was written as an agreement between shareholders in an English company, the language clause may not be needed, and it is recommended that the governing law should be English law.  However, if the shareholders in the company are Chinese, then some of the alternative wording may be considered appropriate.  Legal advice is recommended in any event.

Language. It is useful to specify the governing language when an agreement is signed in two languages.  Where the original version is prepared in English and then translated, it is probably better to have English as the ruling language – and vice versa.

Governing law. This is the law to be applied in any dispute when interpreting the meaning of the agreement.

Resolution of disputes. We have provided for a two stage process: first senior executives of the two parties try to resolve the dispute by direct negotiation. If this fails, then there is a choice – either the courts or arbitration.

There are many factors to be considered when reaching a decision on these matters and we have some free documents on our website that give more information – Z138 Arbitration and Z139 Governing law and Jurisdiction.

For general guidance on preparing and signing contracts please see our notes at https://www.contractstore.comsigning_contracts

 

股 东 协 议 注 释

该基本协议制定用于两个个体决定组成有限责任公司,从事一项新的业务投资、双方各占50%的股份。此协议适用在英国成立并经营业务的公司。在其他国家成立并经营的公司,该协议的某些文字需要修改。

注意:该协议可以添加很多细节,有许多留在空格中待填写。在检查文字是否适用的同时,空格的填写也是可选择的。

在确定某些条款的定义之后,本协议陈述了业务的主要目的,以及在第3条款中双方各需认购首次股份资本。

就股份资本来说,会计师和律师的建议可以值得考虑:例如,如果最初资本要求是10,000英镑,这样做也许更有利:其中1,000英镑作为股份资本剩余的9,000英镑作为股东给公司的贷款被认购。如果采纳了这样的做法,那么其中的措辞应相应的改变。贷款归还以及由此获得利息所依据的条款也需要在协议中作出规定。

第3.3和3。4条款涉及追加资本,第3。5条款更加明确了在需要股东担保金时股东所承担的比例——即各方承担50%的责任。然而,应该记住,需要担保金的第三方银行或贷方可以有权利追诉保证人100%的债务。在这样的情况下需要细致的谈判和听取法律上的意见。

第4条款陈述了利润政策——即商业手段来获取最大的可分配利润。

第5条款涉及到管理人员的任命——经理以及秘书等的任命。在有两个单独股东的公司里,最可能的方案就是一方担任经理,一方担任董事长,可不必经过投票,有时股东双方同意轮流做董事长。另有可能就是股东决定不设董事长,那相关设董事长的条款可以取消。公司秘书可以是其中一位经理,但这可以是由会计师、律师或第三方有资格人等来担任。

第6条款涉及到董事会议的安排,其中最重要的条款是第6。4条款,当董事们对某一行动步骤意见不统一时,该怎么办?解决的办法就是让董事长行使投决定性票的权利,但这很可能不被人数相当的股东双方所接受。如确实存在意见分歧的话——即所谓的“僵局”,那么也许可以按照第15条款中的步骤进行操作。如果公司中的股东们在一天内不能达成协议 ,唯一的解决办法或是一方买下另一方的股份,或是结束公司业务。希望此类事件不会发生,但必须考虑到这种万一。这就是必须具有一个股东协议的原因,当困难出现时,必须有程序来解决它们。

第7条款涉及到日常管理,如果其中之一的股东/董事正进行一项业务,那么此项条款正好适用。类似的情况:如果两个董事已经同意第三方担任经理,此项条款也可相应地使用。

第7.2和7。3条款涉及到一些财政问题——这些问题在成立公司之前就应该得到解决,而不是等到董事第一次会议上陷入僵局。

第8条款涉及指定公司的银行以及签署支票的有关事项。

第9条款涉及到一些常规的事物,即审计员的任命,公司注册办公地点——即正式地址。这常常是参加公司建立的律师或会计师的地址。另一方面,这也可以是总部所在地,或如果是个小公司的话,也许是其中股东的家。

第10条款列举了需要股东双方同意的事项,此条款的拟定不仅涉及到股东会议上所作出的决议,而且涉及到股东的决议或者他们指定的经理人的决定。只要各方股东都占有50%的股份以及有两个董事,那么在作出任何决议之前,都得征求他们双方的同意—除非一位股东有决定票。这些事项的精确列举显而易见是一件要认可的事情。如条款中所拟定的那样,所列举的事项涉及到一个公司考虑所要承担的一个更加关键的金融责任。

第11条款的拟定是用来避免一方股东在没有行到另一方同意的情况下让第三方获得公司中的股权。第11。2条款对家庭公司来说是个例外。但这也需要小心翼翼地对待。当然也需要法律意见。否则家庭公司也许被卖了而另一方股东却发现自己的伙伴变成了另一个他从来没有想到而且不想要的伙伴。

第12条款的拟定用来加强协议中其他规定,确保双方在业务中公平、真诚地对待对方以及公司。

第13条款限制股东双方在与之竞争的企业里拥有股权。是否合适取决于情况而定。

第14条款涉及到一方股东破产或者有严重的违约行为,解决的方法就是另一方的审计员确定的价格购买他/她的全部股份。有时,股东希望确定股份收购价格的计算方式,如果这样的话,计算方式需要在协议中详细说明。

第15条款涉及到双方对公司管理方式产生了僵局的处理程序。实际上,这具有三个阶段。首先,发现僵局,一方股东向另一方股东陈述他/她目前的状况。第15。3条款允许双方经过协商将问题提交调解,如果此举行不通,而且公司业务实际上处于瘫痪,解决办法是一方股东书面通知:或购买另一方的股份或将自己的股份出售给另一方。如协商不成,价格就由审计员确定。如果双方都反对,那么双方有责任召集会议结束公司的业务。

相对来说,剩下的条款都是一些日常锁事,但第17。3条款也许例外:如果一方股东去世,另一方有权利按审计员确定的价格收购去世股东的股份。

第十八条款涉及选择协议适用的语言,法律和争端解决的方式。因本协议涉及的是英国的二个股东,语言选择条款也许可以删除.建议考虑适用英国法律.如果股东是中国人,有些文字需要做相应的调整.有必要就此听取法律人士的意见.
语言。在协议可能有两种文字的文本时,确定法定的一种语言非常重要。如果协议以英语起草后被翻译,最好选择英语为法定语言—反之一样。

适用法律。指发生争端时解释协议时所依据的法律。

争端解决。 我们提供了二层步骤:第一层是双方高级主管之间的直接协商。如果不能释嫌,则是第二步—司法程序或仲裁程序。

在制定决策时,有许多必须考虑的因素。可以从我们网站免费提供的资料中了解更多有关内容—Z138 仲裁和Z139适用法律和司法管辖。

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