When the original shareholders form a company, they usually enter into a shareholders` agreement. The shareholders` agreement establishes the relationship between (a) the Company and the shareholders and (b) the shareholders between them. It also contains many other provisions, including the following: A shareholders` agreement, also known as a founder`s agreement, is a contract between the founders of a company to regulate their rights as shareholders of the company. It consists of various terms that govern the rights and obligations of shareholders vis-à-vis the company. It is a simple document that is used whenever a new investor wants to invest in a company and become a shareholder. It is an abbreviated form of shareholders` agreement, easy to draft and with less legal formalities. The most important thing to include in an Act of Accession is that new investors agree to agree on the terms set out in the existing shareholders` agreement. This is where the instrument of accession comes into play. A new shareholder (who is not a party to the shareholders` agreement) may sign an act of adhesion to the shareholders` agreement. By signing the instrument of accession, the new shareholder is bound by the provisions of the shareholders` agreement as if he were a party to it. The deed of accession should ideally be signed as soon as the new shareholder becomes a shareholder, so that he is immediately bound by the terms of the shareholders` agreement. Lawyers prepare instruments of accession in the form of « deeds » rather than « agreements » to ensure that they are enforceable.
Essentially, the document has a certain form and must be signed in a certain way. An instrument of accession may be used by a party wishing to become a party to an existing shareholders` agreement. This is useful because the rights and obligations set out in the shareholders` agreement apply only to the parties that are parties to the shareholders` agreement. For example, if a shareholders` agreement has been in effect for several years and one of these shareholders (the « outgoing shareholder ») decides to sell his or her shares to a third party (the « new shareholder »), the new shareholder may need to become a party to the shareholders` agreement. Instead of revoking the shareholders` agreement and creating a new one, the parties can use a deed of accession, which is much faster and easier to prepare. This is a great advantage if your shareholders` agreement is accompanied by some form of membership certificate. This saves legal fees because you don`t need to have a new shareholder agreement drafted every time a new investor joins us. Instead, you can include the investor`s details in the deed of membership and make sure they sign it as soon as they become a shareholder. Sometimes they are written as an act survey, so the only person signing them is the new shareholder. At other times, they may require other shareholders to sign or the corporation to sign on their behalf. Sometimes referred to as an « act of loyalty, » an act of membership is an act that binds a person to an existing shareholders` agreement.
By signing a certificate of membership, the new shareholder is bound by the same rules as the existing shareholders. It also ensures that the new shareholder benefits from the rights granted to the other shareholders under the shareholders` agreement. By signing a deed of accession, the new shareholder becomes a party to the existing shareholders` agreement and is bound by all the conditions of that agreement. An Act of Accession is an important document that is used before a new investor is invited to become a shareholder of a company. It is relatively simple and has very few formalities that can save a lot of time and money for any organization. It also acts as a legal obligation for the new investor by fulfilling the obligations set out in the existing shareholders` agreement. The instrument of accession should be a fairly simple document. It should address the fundamental points mentioned above. However, you probably focus primarily on the shareholders` agreement itself, as that`s where your substantive rights and obligations lie.
The exact form of the document depends on the structure of your existing shareholders` agreement. Sometimes the shareholders` agreement includes an annexed act of accession. A shareholders` agreement is binding only on the persons who sign it or agree to be bound by it. This differs from the company`s articles of association, which are automatically binding on all shareholders (new and existing) due to the German Joint Stock Company Act. If you are an investor, there are a number of things you should consider before making your investment, as we explain here. Depending on the size and circumstances of your investment, it may be appropriate to amend the shareholders` agreement before signing it. When new people invest in the company, they receive shares and become shareholders. They are not automatically bound by the terms of the shareholders` agreement, but they must somehow be such that the provisions that apply to all original shareholders also apply to them. The great thing about an act of accession is that it saves the parties from having to sign a new shareholders` agreement every time a new person acquires shares in the company. Instead, each new shareholder simply signs a short act of membership in which they agree to be bound by the terms of the existing shareholders` agreement. If a shareholders` agreement exists, new shareholders usually have to sign a deed of membership before they can be registered as shareholders.
First, the new shareholder may need to review the shareholder agreement to ensure that he or she is indeed willing to be bound by the terms of that shareholder agreement. If in doubt, they may need to seek legal advice. In addition, the shareholders` agreement may lay down certain rules that must be complied with in the case of a new shareholder and/or an outgoing shareholder. For example, in some shareholder agreements, it is required that any shareholder who wishes to leave the corporation first offer their shares for sale to other shareholders before offering them for sale to a third party. Similarly, some shareholder agreements stipulate that a new shareholder must sign a deed of accession in a certain format. In some cases, an example of a copy of the shareholders` agreement is attached. If our document is not in the required format, it may not really be legally valid. Once our instrument of accession has been completed, either party can revise and sign it. Each party should keep a copy for its own records. A copy must also be kept with the company`s documents at the company`s head office. Please note that the Australian Securities and Investments Commission (ASIC) may also need to be notified of a change in shareholders or the issuance of new shares.
For more information on what ASIC needs to know and relevant reporting procedures, please visit the ASIC website. There may be penalties for non-compliance with AsIC requirements. This document was conceived as an act and not as an agreement. Certain formal conditions must be met for a document to be validly signed. This document must be signed in accordance with these formal requirements, otherwise it may not be legally binding. If the parties have any concerns, they should seek legal advice. .