Five Percent Shareholder Checklist

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US-DD06026
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Description

This form is a due diligence checklist that outlines information pertinent to five percent shareholders in a business transaction.

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FAQ

5% Owner means an individual who owns (or is considered as owning, within the meaning of Code Section 318) more than 5% of the outstanding stock of the Company or stock possessing more than 5% of the total combined voting power of all stock of the Company.

Introduction. Why have a Shareholders' Agreement? Identify the interests of the Shareholders. Identify Shareholder Value. Identify who will make decisions - Shareholders or Directors? Decide how the voting power of Shareholders should add up. Decide on the issues that the Shareholders' Agreement should cover.

5% Owner means any Person that owns 5% or more of the Company's Ordinary Shares on a fully-diluted basis. Sample 2.

A shareholders' agreement is an agreement entered into between all or some of the shareholders in a company. It regulates the relationship between the shareholders, the management of the company, ownership of the shares and the protection of the shareholders. They also govern the way in which the company is run.

Protection against dilution. The right to appoint a director. Rights to access information. Tag along and buy out rights. Pre-emptive rights. Limits on the Board's control. Protections against breach.

Introduction. Step 1: Decide on the issues the agreement should cover. Step 2: Identify the interests of shareholders. Step 3: Identify shareholder value. Step 4: Identify who will make decisions - shareholders or directors. Step 5: Decide how voting power of shareholders should add up. Further information and documents.

Common problem areas include the following: Directors -v- members. Transfer of shares. Approving a change in business direction. Managing changes in the roles shareholders play. Injection of debt. Competition. Exit.

There is another simple way to view the list of shareholders of the company in the MCA website, which is as follows: Visit the site : www.mca.gov.in and click on the icon 'MCA 21' Login by clicking the login option on right side of the page.

Any shareholder has a percentage ownership in the company, determined by dividing the number of shares they own by the number of outstanding shares.

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Five Percent Shareholder Checklist