From a technical point of view, “gains available for distribution” are the excess of accumulated realized gains over accumulated realized losses and effectively correspond to retained profits or retained reserves. In practice, most companies will not have built up the necessary reserves at the beginning to allow the company to acquire its own shares. As a result, it is unwise to simply provide that an outgoing employee shareholder must sell his shares to the company. It is best to give the board of directors the power to determine who will buy the shares of an outgoing employee shareholder. You will understand, of course, that the content of a shareholders` agreement will ultimately be determined by the specific facts of each situation and by the relative strength of the negotiations between the different parties. However, most shareholder agreements cover the following areas: it is sometimes said that incorporations could address all the issues that could generally be seen in a shareholders` agreement. While this is true, there are some important reasons why shareholders more often choose to settle their relationship with each other as shareholders through a shareholders` agreement and not just the Constitution. These reasons are discussed in the next section. As I have already mentioned, a shareholders` agreement can be used to attach it to the agreement in a capacity other than that of shareholder. It will often be noted that part of a shareholders` agreement is both a director and a shareholder. In those circumstances, account must be taken of the fact that a director has the primary duty to act in the best interests of the company and that he cannot inferior his obligations in that regard.
This point must be taken into consideration when a part of a shareholders` agreement is or becomes a shareholder. Pre-emption rights can result from one of three sources: the procedure for requesting or not applying subscription rights varies from one company to another, depending on whether legal or amended provisions apply. Prior to the issuance or transfer of shares, directors should refer to the articles of association and all shareholder agreements to ensure that the appropriate procedure is followed. Subscription rights also provide an incentive for companies to grow well so that they can, if necessary, issue a new share cycle towards a higher valuation. As explained above, the articles of association can only bind a shareholder in his capacity as a shareholder. . . .