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Frequently asked questions > Company > Administrative arrangements > What is a shotgun clause in a shareholder agreement?

What is a shotgun clause in a shareholder agreement?

The "shotgun" clause is a clause of buy/ sell of shares. It allows a shareholder to offer his shares for sale to the other shareholders. However, if that one or those refuse this offer, they will necessarily have to offer their shares to the offeror, at the same price and conditions. On the contrary, the offeror can also decide to offer to redeem the shares of the other shareholders, and if the latter refuse the offer, they will have to buy the shares of the offeror, always at the same price and conditions. The number of shares held and financial situation of the different shareholders must be evaluated before choosing to include this type of clause within an agreement. The shareholders should have a situtation of equals to do so.

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