Special Approval matters
What types of matters typically require “special approval” in the Shareholders Agreement?
An advantage of a Shareholders Agreement is that it allows shareholders to adopt provisions that increase their protections. One of the most common protections includes the imposition of a supermajority or unanimous shareholder consent before taking certain significant actions.
- Among the matters that typically require a two-third or special approval in a Shareholders Agreement, you can find the following:
- the acquisition of any other business;
- the amendments to the Articles of Incorporation;
- any decision regarding the structure of the corporation;
- any decision regarding the dissolution, liquidation or winding-up of the corporation;
- any transaction between the corporation and any new person that has not dealt with the corporation previously;
- any issuance of additional shares or securities of the corporation; and
- any sale of all or a substantial portion of the assets of the corporation.
In summary, shareholders agreements may require special approval for any type of matters that can be considered fundamental changes in the structure and business of the corporation.