In general, share purchase agreements will include a clause whereby the shareholders agree to elect one another as directors in perpetuity, as well as clauses regarding the appointment of executives, each shareholder’s time commitment to the company’s , the financial contribution and guarantees to be provided by each shareholder, and the distribution of revenues among the shareholders. In fact, the shareholders will ensure that they are at all times elected and/or reelected or appointed as directors of the company, with the distribution of seats on the board of directors must reflect their shareholding in the company; furthermore, they undertake to ensure that their designated representative on the board of directors exercises their voting rights to ensure that the individuals they designate hold the positions within the company that have been designated as executive roles.
Through these clauses, the description of the duties of each shareholder in a purchase and sale agreement is an important element that must be considered and never overlooked, as it reflects the basic principles on which the shareholders have agreed and from which they will not wish to deviate. This description of duties may serve, in particular, to resolve—in the event of a disagreement among the shareholders—the forced withdrawal or the removal of a shareholder who no longer fulfills the duties he or she had committed to perform or who has become unable to perform them, as well as, consequently, the repurchase of that shareholder’s shares.