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Entrusted Shareholding Agreement
"I need an Entrusted Shareholding Agreement under German law for my family business where my brother will act as the entrusted shareholder for my 25% shareholding in our manufacturing company while I'm working abroad for two years starting January 2025."
1. Parties: Identification of the entrusting party (beneficial owner) and the entrusted shareholder, including full legal names, addresses, and registration details if applicable
2. Background: Context of the arrangement, including details of the company whose shares are being entrusted and the reasons for the entrustment arrangement
3. Definitions: Key terms used throughout the agreement, including 'Entrusted Shares', 'Company', 'Beneficial Owner', etc.
4. Subject Matter of Entrustment: Detailed description of the shares being entrusted, including number, class, and nominal value
5. Declaration of Trust: Formal declaration that the entrusted shareholder holds the shares on behalf of the beneficial owner
6. Rights and Obligations of the Entrusted Shareholder: Detailed provisions regarding voting rights, dividend handling, and other shareholder responsibilities
7. Rights and Instructions of the Beneficial Owner: Powers of the beneficial owner to give instructions and exercise control over the shares
8. Economic Benefits: Provisions regarding the pass-through of dividends, distributions, and other economic benefits
9. Costs and Compensation: Terms regarding any fees or compensation for the entrusted shareholder and allocation of costs
10. Duration and Termination: Term of the agreement and circumstances under which it can be terminated
11. Transfer and Return of Shares: Procedures for transferring shares back to the beneficial owner or to third parties
12. Confidentiality: Provisions regarding the confidential nature of the arrangement and permitted disclosures
13. Governing Law and Jurisdiction: Specification of German law as governing law and jurisdiction for disputes
1. Tax Matters: Specific provisions regarding tax handling and responsibilities - include when tax implications are significant or complex
2. Death or Incapacity: Provisions dealing with death or incapacity of either party - particularly important for individual parties
3. Security Interests: Provisions regarding creation or prohibition of security interests over the shares - include when relevant to the particular arrangement
4. Corporate Actions: Specific provisions regarding handling of corporate actions like rights issues or share splits - include for listed companies
5. Multiple Beneficial Owners: Additional provisions for cases where shares are held for multiple beneficial owners - include when applicable
6. Change of Control: Provisions dealing with change of control of corporate parties - include for corporate beneficial owners
7. Regulatory Compliance: Specific provisions regarding compliance with particular regulatory requirements - include for regulated industries
1. Schedule 1 - Share Details: Detailed description of the entrusted shares, including share certificates numbers and dates of issue
2. Schedule 2 - Company Information: Details of the company whose shares are being entrusted, including registration information and articles of association
3. Schedule 3 - Initial Instructions: Initial set of standing instructions from the beneficial owner to the entrusted shareholder
4. Schedule 4 - Fee Schedule: Detailed breakdown of any fees and expenses payable to the entrusted shareholder
5. Schedule 5 - Power of Attorney: Form of power of attorney to be granted to the entrusted shareholder
6. Appendix A - Notification Forms: Standard forms for notifications between parties
7. Appendix B - Transfer Forms: Pre-agreed forms for share transfers
8. Appendix C - Reporting Templates: Templates for regular reporting by the entrusted shareholder to the beneficial owner
Authors
Financial Services
Private Equity
Investment Management
Real Estate
Family Offices
Professional Services
Manufacturing
Technology
Retail
Healthcare
Energy
Infrastructure
Telecommunications
Mining and Resources
Legal
Compliance
Corporate Secretariat
Investment Management
Corporate Finance
Wealth Management
Corporate Governance
Risk Management
Private Client Services
Trust Administration
Legal Counsel
Corporate Lawyer
Compliance Officer
Company Secretary
Trust Manager
Investment Manager
Corporate Governance Officer
Chief Legal Officer
General Counsel
Managing Director
Board Member
Chief Financial Officer
Corporate Structuring Manager
Wealth Manager
Private Client Advisor
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