The agreements are agreements between shareholders that regulate common behavior to influence the life of the company.

Shareholders' agreements: what they are and how they work

The shareholders’ agreements [1] are distinct but accessories to the social contract. They implement regulation of different or complementary relationships with respect to that provided for by the articles of association or the deed of incorporation of the company and, given their extraneousness to the latter, they are not opposable to it (unless the same participates in them through its organs, assuming specific obligations).

Unlike the articles of association and the deed of incorporation which are binding for all current and future shareholders, the shareholders‘ agreements have a mandatory effect and, therefore, only oblige those who sign them and are not opposable to any other non-adherent shareholders, nor to the company and nor to third parties in general. You will find in another article the further differences between the statute and the paratociali agreements.

With the consequence that if, for example, a ban on the sale of shareholdings has been established, any transfer in violation of the agreement will be valid and effective towards the third buyer and the company, while in relations between shareholders it will oblige those who have violated the pact only for damages.

This in principle. In this regard, an important sentence of the Court of Genoa of 8 July 2004 must be pointed out which ruled, unlike all the previous jurisprudence, the real effectiveness of the shareholders ‘ agreements, providing for the suspension of the effectiveness of the transfer of the company shares carried out in violation of the shareholders’ agreement and the right of first refusal.

Main features:

1. Form
The shareholders’ agreements have a free form, therefore they can be stipulated with a public deed, authenticated or simple private deed, orally or even by concluding deeds.

2. Duration
The shareholders’ agreements relating to unlisted companies have a duration that cannot exceed 5 years and, if a longer duration is envisaged, the term is reduced to 5 years.
In any case, they can be renewed upon their expiry.
In the event that an expiry date has not been established in the shareholders’ agreement, each contracting party has the right to withdraw from the agreement with a notice of 180 days.

3. Purpose
The shareholders’ agreements generally have as their object:
– the appointment of the members of the corporate bodies, the number of members of the corporate bodies that each member has the right to designate, the criteria for the appointment of corporate offices;
– exercise of the right to vote in the company ( voting syndicates );
– the limits on the transfer of the company’s shareholdings ( block syndicates );
– the exercise of direct influence on the management of the company to achieve certain objectives ( control syndicates );
– the criteria for sharing profits and losses;
– the financing of the company;
– the shareholders’ liability regime;
– prior consultation on the matters specified in the agreement, which are the subject of a vote in the shareholders’ meeting ( consultation agreements ).

The most common shareholder agreements in practice are:

1. Voting syndicate by which the adhering shareholders undertake to vote in a predetermined manner in the shareholders’ meeting.
Usually, these shareholders’ agreements are used by those shareholders who alone would not have the votes to exercise a dominant influence in the meeting.
The syndicated members can decide the modalities of voting in the assembly unanimously or by the majority.
In the past, jurisprudence has contested the validity of this type of agreement by majority decision, arguing that the voting union stripped the assembly of its functional competencies by creating fictitious majorities. Today, however, both doctrine and jurisprudence consider them legitimate.
In drafting the shareholders’ agreement, it is advisable to be very careful not to completely deprive the corporate bodies of the company. In fact, the agreement can be considered null and void if it is in contrast with mandatory rules or constitutes an instrument of circumvention of the general principles of the legal system that underlie them.

2. Blocking syndicate by which the participating shareholders establish limits on the transfer of their shareholding to third parties for a certain period of time.
The aims of the block unions can be summarized in:
– optimization of the value of the shareholding;
– strengthening of the voting syndicate;
– strengthening of the group to which they belong.

For completeness, we also mention:

3. Consultation agreement by which the adhering shareholders provide for the obligation of prior consultation on certain matters before calling the shareholders’ meeting.

4. Control syndicate or management syndicate through which the syndicated shareholders regulate the exercise, even jointly, of a dominant or controlling influence over a company in order to exercise the decision-making power necessary to achieve certain objectives.
As with voting unions, this type of agreement can also represent an instrument for circumventing the powers of the corporate bodies, depriving them of the management power envisaged by the regulations and their validity will have to be examined on a case-by-case basis.