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Shareholder Agreement Profit Distribution
Changing a dividend policy has tax consequences. Capital gains from the sale of the company are taxed at a different rate than dividends taxed as income. The reason for a shareholder who would like to agree on a dividend policy might be to reduce a certain type of tax. Other shareholders should be aware that this should also have an impact on them. It is advisable to discuss the specifics of the transfer (sale) of the shares in the shareholders` pact if one or more shareholders decide to withdraw from the transaction. Shareholder agreements often contain provisions that allow professional investors to gain some control over the company in which they invest, for example.B. it may be expected that other shareholders will not be allowed to transfer (sell, exchange, give) their shares to third parties for the duration of the shareholder contract. In addition, shareholder agreements often contain provisions for the withdrawal of shares, providing for specific deadlines, prices, etc. It should be noted that specific provisions relating to the transfer of shares should not be contrary to the legal (binding) provisions and the company`s statutes. In short, a shareholder contract is a legal instrument that facilitates mutual relations between shareholders and opportunities to attract new investment. It also sets out specific commitments of shareholders to each other and the company to help avoid or at least reduce the chance of disputes as the company grows. 1.1 The shareholders are all shareholders of the company, a company [STATE OF INCORPORATION] and are the sole directors and senior executives of the company.
Each owner will have a different purpose in terms of the use of profits and, ultimately, how the value of the business is removed. One might think that the best strategy is to reinvest money in the business to grow it quickly, so that it can be sold in a short time for increased value, while another might believe that the cashless down payment to investors on wages and dividends on a long-term basis is better.