Estimated reading time (in minutes)

In a public limited company, the shareholders establish a shareholders’ pact which organizes the life of the company and its management. A certain number of clauses make it possible to optimize coordination between the shareholders, in particular concerning the development of the powers of the directors. It is during the general meeting that the shareholders make major decisions such as the distribution of dividends.


The shareholders’ agreement:


The shareholders’ pact is a contract that governs the life of the company and its management. It protects the converging interests of shareholders. This contract has a flexible form and is concluded with or without a lawyer. It can be established only between certain shareholders. It allows, for example, to approve a shareholder or to ensure his exit.


Coordination between shareholders:


Coordination between shareholders is provided for by the articles of association or by shareholders’ pacts to coordinate the interests of the partners. Certain clauses can be passed as voting agreements to ensure the appointment of directors or their dismissal. Agreements may also provide for the protection of minority shareholders. These clauses must make it possible to coordinate and harmonize the shareholders’ policy in the company.


What is their control over the company?


The shareholders meet once a year at a general meeting. This is where they appoint the directors and vote on whether or not to distribute dividends. Furthermore, they can decide to set up non-aggression pacts in order to prevent certain shareholders from strengthening their power to the detriment of other shareholders. The aim is to ensure their common interest for better control over the management of the company.

DAMY Law Firm , Nice, Shareholders’ Agreement, Update 2022