Clauses that a pact of partners must have

An agreement of partners is a contract signed by all the partners of a company and in which the conditions on which the company is created or governed are clearly stated, it defines the different roles of the entrepreneurs, the percentage of the company who will own and what will happen in the event that one of the partners leaves the company. Partner agreements are private documents that must be signed whenever they are established, a new member is added or the conditions of a partner or company are modified. They are very important to try to maintain good relations between partners in the future and avoid potential problems or complications. Then we explain what clauses must have a pact of partners, there are many more but we expose the most important clauses.

Purpose of the company and Constitution of the SL

This clause specifies what will regulate the rest of the clauses, such as the regulation of certain aspects of the operation of the Company's management body, the limitation of certain specific actions of the administrative body and the establishment of regulatory rules for the transmission regime of the social participations of the Society. It will also serve to present the parties and indicate the reason why the company is created (main activity) and to constitute the company itself with the signatures of all partners, correctly identified.

Regulation of the conditions of the Administrator / s of the company

This clause of the shareholders' agreement specifies what the Administrator of the Company can and can not do with and without supervision of the Governing Body of the Company, such as making purchases on behalf of the Company up to a maximum amount, requesting loans on behalf of the Company or hire personnel for the Company without the approval of the Governing Body. If there is more than one administrator, it can be joint or solidary. At this point it is very important to delimit the power of the administrator and the founding partners with respect to it, since if the administrator does not fulfill their responsibilities, ways must be established to protect the company and cease or change the administrator if necessary.

Accompaniment and carryover clause

Accompanying Clause or Tag - along, serves to protect the interests of a financial partner by which it is allowed to leave the company, recovering the investment made. Drag clause, Drag along, consists in the obligation for minority shareholders accompany the sale of their shares (at the same price) to the majority shareholder in case of the sale of 100% of the shares of the company. Related to the price of the shares we also find another clause related to the establishment of a minimum sale price of the company's shares, making sure that whenever shares are sold, at least part of the initial investment is recovered.

Regulation of the board of directors and General Meeting of Members

This clause must explain the members in number and name of the board of directors, the period expressing the periodicity of the meetings. Meetings of the Board of Directors are held quarterly. The key is that they have some control over the evolution of the company.

Permanence, non-competition and conditions of the entrepreneurial partners

The investing partner will want to ensure that the conditions of the entrepreneurial partners are fixed and maintained over time. The permanence may vary but usually ranges from 2 to 4 years and with penalty clauses in the event that it breaks, as with non-competition, which normally has a remuneration upon termination of the agreement with the company. When it comes to non-competition, it is usual to ask the partners not to have investments in competitive companies, although it may be more or less complicated to agree on what partners we are. To avoid problems, the activity of the company and competitors must be well defined.

When dealing with partners that will work in the company, clauses related to intellectual property are usually added, preventing the use of products, clients and information obtained during their working life within the company. In addition, all partners must sign a confidentiality agreement to prevent private or sensitive information from circulating outside the company, also establishing a prohibition to disclose any aspect that is dealt with at the Shareholders' Meetings or included in this agreement.

Right to veto the distribution of shares among the Company's own Members

These types of transactions are usually restricted to the presentation of the Governing Body so that they can be decided at the General Meeting with a simple majority of votes representative of the Company's share capital. This is a way to establish control over the generation of new participations and the entry of possible new partners in the company, since this entry must be approved by all current partners.

Jurisdiction, good faith and binding

There are other standard clauses that are usually added to the partners' agreement. These clauses are related to the purpose of recording that it is a document that binds all signatory parties legally and that all act in good faith in order to comply with all the clauses specified, so that if they are broken, They can be brought before a judge. The Courts that must resolve possible differences must be established in the jurisprudence section, being this of vital importance in cases in which the partners are from different geographical places.

Tips
  • The tag and drag are not obligatory but if you put a tag in the partners' agreement also put a drag and vice versa