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Ask Attorney Arcadier Your Own Question
Attorney Arcadier
Attorney Arcadier, Attorney
Category: Business Law
Satisfied Customers: 1106
Experience:  Contract questions and Incorporation questions answered.
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I am the majority shareholder 70% in a company in Australia.

Customer Question

I am the majority shareholder 70% in a company in Australia. I have a shareholder agreement with a partner who i gave 30% shares. I am selling another 10% of my shares to a third party who the partner has agreed to. I would like to know if the original partner needs to sign the shareholder agreement for the new partner. I want the existing shareholder agreement with the old partner to stand as I have added a few amendments to the shareholder agreement for the new partner (e.g. they will not be a director of the company rather a working shareholder).
Submitted: 4 years ago.
Category: Business Law
Expert:  Attorney Arcadier replied 4 years ago.

Attorney Arcadier : Shareholder agreements must be the same for same class shareholders. You can sell class A and Class B where class b has certain restrictions such as voting. Thats one way around it. This must be carefully set up so as to avoid any breach of fiduciary claims if a class b shareholder becomes disgruntled.
JACUSTOMER-mq2onfo0- :

so what your saying is that i need to modify the existing agreement and all three parties need to sign this?

JACUSTOMER-mq2onfo0- :

or can i have the exact same agreement with both shareholders and they sign individual agreements with me?

Attorney Arcadier : either way can be done, first way is preferred. But, if you really want different terms, it can still be done by issuing a separate class of shares. You will have A preferred or B class. But this is a complex way of doing it which should be professionally done. So, if you can do same agreement, then best way is for all of you to sign a new one. But, again, many different ways of doing it.

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