As a shareholder in a company, it is important to know your rights and responsibilities. One way to ensure that all parties involved are on the same page is by having a shareholders agreement. In Cyprus, this agreement is governed by the Companies Law, Cap. 113.
A shareholders agreement is a legally binding contract between the shareholders of a company. It sets out the rights and responsibilities of each shareholder, as well as the rules for how the company will be run. It is not a public document and is only binding on the parties who sign it.
The Companies Law in Cyprus allows for shareholders agreements to be used as a way of regulating the company’s affairs. According to section 28 of the Law, such agreements must be in writing and signed by all parties. The agreement must also be lodged with the Registrar of Companies within 15 days of being signed.
One of the main benefits of having a shareholders agreement is that it can provide clarity around the ownership of the company. The agreement can set out the percentage of shares each shareholder owns, as well as any restrictions on transferring shares. It can also outline how any disputes between shareholders will be resolved.
The agreement can also provide guidance on how the company will be managed. For example, it may set out the process for appointing directors, how often board meetings will be held, and the requirements for passing resolutions.
Another important aspect of a shareholders agreement is the protection it provides for minority shareholders. In Cyprus, minority shareholders (those who own less than 50% of the shares) have limited rights. However, a shareholders agreement can include provisions to protect the interests of these shareholders, such as giving them the right to appoint a director or veto certain decisions.
It is important to note that a shareholders agreement cannot override the Companies Law or the company’s articles of association. If there is a conflict between the agreement and these documents, the law and articles will take precedence.
In conclusion, a shareholders agreement is an important document for any company with multiple shareholders. It can provide clarity around ownership, management, and dispute resolution, and can protect the interests of minority shareholders. Under Cyprus law, such agreements must be in writing, signed by all parties, and lodged with the Registrar of Companies. As a shareholder, it is important to ensure that you understand the terms of the agreement and how it relates to the Companies Law and the company’s articles of association.