Group items tagged

The first and foremost interest of a founder is to secure his interest. His interest is to help the company grow and create a market presence. Tag along and Drag along clauses of the shareholder's agreement include provisions with regard to a possible transfer of shares or holdings. These are contractual obligations generally included in the articles of association or a shareholders agreement.

Leaver provisions describe what will happen when an investor or employee decides to leave the company. Leavers can be either "good" (the time of employment has naturally come to an end) or "bad" (exit due to fraud, disqualification or gross misconduct). These provisions play a deterrent role by not letting the shareholder leave before a certain date. If they leave before the specified date (thus a bad leaver) they may be asked to forfeit their shares so that they don't continue to accrue profit from the company even after exiting it.