Shareholding agreement

Mudit Shukla (Querist) 19 November 2018 This query is : Resolved
My client, Rhythm Equity Pvt Ltd, (Investor) is a foreign venture capital fund registered in India. They wish to make an investment by way of a fresh issue of shares into Blues Pvt Ltd, (Company) a company registered in India. Ms Aguilera, (Promoter) of the Company will continue to hold 73% of the shareholding post issue. In the course of their negotiations, the Investor suggests that they insert a clause into the SHA to be able to appoint two out of five directors on the Board. The Promoter notes that the provisions of the Companies Act 2013 provide for the majority shareholder to appoint the Board. The Investor seeks my advice as to whether the SHA can contain a clause for a particular shareholder to appoint directors, even if they are not majority shareholders.

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DR.VEDULA GOPINATH (Expert) 20 November 2018
Yes. SHA should contain more protective clauses fact make. Shareholder
Please send more details
Cs Dr Gopinath Vedula Dr. Lawyer/Arbitrator
vgnath@gmail.com

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