Knowing that a co-shareholder cannot manage the transaction itself (for example. B after an accident or succession), it may allow another to take advantage of this situation and trigger the clause of the pellet gun clause at a price lower than that which the shareholder could lead to the company. The share price is then strongly influenced by the individual shareholder`s inability to run the company, not the performance of the company. Call options in the SHAs haunt shareholders or the entity to compel a shareholder to sell its shares to them or the company at a certain price or a predetermined formula. A call option includes triggers other than automatic transmissions and can be an effective way to remove a shareholder from a company. A call option may be limited and cut to be exercised at a later date or date or caused by certain events such as. B where: shareholders cannot agree on specific issues; it is not possible to reach the level of approval required for specific issues, such as investments or dividends; or a shareholder is simply a problem, causes trouble or is incompatible. A valuation clause defines a method of determining the value of the shares. Since it is not a listed company that can easily determine the value of its shares, it is good for a private company to have an valuation clause for a variety of reasons. This clause defines how the value of the shares is determined, which becomes necessary if shareholders want to sell their shares or when a shareholder dies and other shareholders want to buy those shares. An valuation clause is essential and is primarily intended to avoid litigation when a shareholder wishes to leave the company, in the event of retirement or for other reasons Theoretically, the shareholder exercising the clause should choose a price that evaluates the business fairly – a price at which he would find it fair to buy as a sale. The price offered cannot be as good as the shareholder`s information about the transaction.
Accounts are usually created for shareholders at longer periods, certainly every year, perhaps quarterly. Many things can change within the company in a short time, and since the pellet gun clause can be triggered and concluded in a few months, shareholders may not have the information they need to decide whether they want to sell or buy. As mentioned above, one method to eliminate the influence of unwanted shareholders is to issue more shares to everyone else. Pre-purchase clauses reduce the effectiveness of these methods, as the company is required to first offer existing shareholders newly issued shares relative to their existing holdings. This will ensure that existing shareholders have the opportunity to participate in new share issues without dilution.