Our team advised the Client/Car Dealer to negotiate Shareholders Agreement.
Key areas of focus included: Lawyers helped negotiate the allocation of
shares, ensuring that the client’s ownership percentage reflects their capital
contribution or other value brought to the business. They also outlined the
process for issuing new shares and how this affects existing shareholders.
Advised how voting power is distributed, especially for major business
decisions like selling the company, changing the nature of the business, or
raising significant debt. The client was guided to negotiate favorable terms if
they want control over key decisions. Lawyers ensured that the agreement
clearly defines who sits on the board, how directors are appointed, and their
responsibilities. This is crucial for the client to maintain influence over the
dealership’s day-to-day operations and long-term strategy. The lawyers
worked with the client to establish a clear policy for distributing profits,
including how and when dividends will be paid, ensuring the client receives a
fair share of the dealership’s profits. Lawyers negotiated buy-out clauses,
including “right of first refusal” and “drag-along” and “tag-along” rights. These
provisions help protect the client’s interests if other shareholders want to sell
their shares or if the dealership is being sold to a third party. To protect the
dealership’s trade secrets and market position, the agreement may include
non-compete clauses preventing shareholders from engaging in competing
businesses, as well as confidentiality obligations.
By focusing on these aspects, lawyers help their car dealer clients secure a
shareholders’ agreement that promotes stable governance, financial fairness,
and future growth while mitigating risks. Navigating these agreements with
expert legal and market advice ensures smoother expansion and operational
success. For detailed assistance, contact our team for tailored guidance.