Voting Rights In Shareholder Agreement

Voting rights clauses are clauses by which a shareholder of a company agrees to vote in a certain way or to abstain, according to some authors. Until the entry into force of the law of 10 August 2016 reforming the law of 10 August 1915 on trading companies (together the « LCC »), no legal provision directly established the validity of such clauses. The validity of such clauses was therefore the subject of a relatively long debate and lively in education before being gradually confirmed by case law, provided that these voting rights (a) do not completely and durably eliminate the right of the shareholder to participate in social consultations, b) are not contrary to the interest of the company and (c) are free from any fraud. Another part of the legal literature considers that these clauses would be valid. According to this doctrine, there is no text prohibiting the transfer of the right to vote, so that, like other rights related to the share, it would be a specific right of the shareholder who could freely dispose of it. This part of the doctrine can base its position and thesis on the recent reform of the CCA. Indeed, with the reform of the CCA in 2016, the legislator has largely weakened the essential and sacred nature of the right to vote. In particular, by authorising shares without voting rights, without the need to add preferential financial rights, by suspending the voting rights of certain shareholders defaulting by the management body or by renouncing shareholders to all or part of their voting rights. Shareholders` obligations: If shareholders are expected to provide services or intellectual property for their shares, the conditions and requirements should be clearly defined. It would seem that the conditions of duration, scope of the purpose of the voting obligation and conformity of the object at all times with the interest of the company that previously prevailed for the validity of the voting promises have been abandoned (although it is perhaps still a little too early to state this without reservation). For example, a practitioner who does not enter into a temporary electoral obligation, but an obligation of indefinite duration, will at least keep in mind that in principle, any permanent obligation can always be terminated with a reasonable period of time.

[7] Article 544 of the Belgian Companies Code provides that the articles of association « may limit the number of votes that each shareholder has at general meetings, provided that this limitation is imposed on all shareholders, regardless of the number of shares for which they vote ». Since a company`s officers and board of directors manage its day-to-day operations, shareholders are not allowed to vote on basic day-to-day operational or management matters. However, shareholders can vote on important business issues, such as. B amendments to the articles of association or the vote or deselection of the members of the board of directors. Although common shareholders generally have one vote per share, preferred share holders often have no voting rights. If the president doesn`t have a decisive vote, he can`t change an impasse. .