In this context, you will understand that, in certain circumstances, a SHA is a useful tool that provides a procedural framework for the internal management of the company and determines the cases in which decisions must be made by directors or shareholders. The preparation of a formal agreement draws the attention of all shareholders to their mutual obligations as well as their rights. A shareholder agreement protects not only all parties involved, but also the existence of the company. What exactly can be included in a shareholders` agreement? A shareholder contract (SHA) is a private contract between the members of the company that contains, among other things, the rules relating to the management and ownership of the company. A SHA rules out this relationship and sets the basics in case of a blockage. It is important that shareholders take a SHA before or after the creation of the company in order to become aware of their rights and obligations among themselves. SHA acts as protection and offers shareholders more protection and comfort. Normally, the best way to enter into a shareholders` agreement is to create the company and issue the first shares. In fact, it can be a positive exercise to ensure that there is a common understanding of shareholders` expectations of the company. However, it should also be noted that any provision of the shareholders` agreement in violation of a legal provision of the law (Cyprus companies Law cap.113) in respect of Cyprus is considered invalid, Law.In in addition to this point, a shareholders` agreement and the statutes of a company should be compatible.
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