If a buyer wants to acquire 100% of the shares; AND If a certain percentage of shareholders agree to accept the offer, THEN All the shareholders (including the shareholders who rejected the offer) must sell their shares to the buyer on the terms offered by the buyer. Importantly, the buyer must be a genuine third party this provision – cannot be used by a shareholder to forcibly buy up all the other shareholders' shares. (You can actually agree and add wording which achieves that, but that's a different discussion). Lastly (sorry, we did say it was complicated) each shareholder will need to first offer his/her shares to the other shareholders before the Come Along clause can apply. So, as you will remember from the MOI, no shareholder can sell his shares until he has first offered those shares to the other shareholders. If you think about it, this is only fair shareholders – should not be able to force minorities to sell their shares unless they are also first given the opportunity to buy the majority shareholders' shares. Come Along If the answer to question 11 was Effectively, we are asking what percentage of shareholders must Minimum "Yes", then what percentage of accept the offer by the buyer. Percentage Shareholders must accept the offer However, you "count" shareholders by adding up the in order to force all shareholders to percentage of shares they each sell their shares? hold. When that percentage reaches your agreed minimum, then the Come Along clause takes You must complete the following effect. sentence: The most common percentage we see for Come Along clauses is Shareholders holding not 75% - because by then so many less than [INSERT]% of the shareholders would be in favour of issued Shares of the Company the sale, that it seems unfair that the minority (less than 25% of must accept such offer in respect shareholders) would be able to of all their shares. block the sale.
If a buyer wants to acquire 100% of the shares; AND If a certain percentage of shareholders agree to accept the offer, THEN All the shareholders (including the shareholders who rejected the offer) must sell their shares to the buyer on the terms offered by the buyer. Importantly, the buyer must be a genuine third party – this provision cannot be used by a shareholder to forcibly buy up all the other shareholders' shares. (You can actually agree and add wording which achieves that, but that's a different discussion). Lastly (sorry, we did say it was complicated) each shareholder will need to first offer his/her shares to the other shareholders before the Come Along clause can apply. So, as you will remember from the MOI, no shareholder can sell his shares until he has first offered those shares to the other shareholders. If you think about it, this is only fair – shareholders should not be able to force minorities to sell their shares unless they are also first given the opportunity to buy the majority shareholders' shares. Come Along Minimum Percentage If the answer to question 11 was "Yes", then what percentage of Shareholders must accept the offer in order to force all shareholders to sell their shares? You must complete the following sentence: Shareholders holding not less than [INSERT]% of the issued Shares of the Company must accept such offer in respect of all their shares. Effectively, we are asking what percentage of shareholders must accept the offer by the buyer. However, you "count" shareholders by adding up the percentage of shares they each hold. When that percentage reaches your agreed minimum, then the Come Along clause takes effect. The most common percentage we see for Come Along clauses is 75% - because by then so many shareholders would be in favour of the sale, that it seems unfair that the minority (less than 25% of shareholders) would be able to block the sale.
Shareholders_Agreement.docx