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Entrusted Shareholding Agreement Template for Germany

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Key Requirements PROMPT example:

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."

Document background
The Entrusted Shareholding Agreement is a crucial document used in German corporate practice when direct share ownership needs to be structured through a trust-like arrangement. This arrangement may be necessary for various reasons, including corporate structuring, family wealth management, or regulatory compliance. The agreement is particularly relevant in scenarios where beneficial ownership needs to be separated from legal ownership while maintaining compliance with German corporate law, transparency requirements, and anti-money laundering regulations. The document provides a comprehensive framework for managing the relationship between the entrusting party and the entrusted shareholder, covering aspects such as voting rights, economic benefits, reporting obligations, and termination provisions. It is essential to ensure the agreement complies with German legal requirements, particularly regarding notarization of share transfers and registration in the transparency register where applicable.
Suggested Sections

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

Optional Sections

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

Suggested Schedules

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

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
































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Relevant Industries

Financial Services

Private Equity

Investment Management

Real Estate

Family Offices

Professional Services

Manufacturing

Technology

Retail

Healthcare

Energy

Infrastructure

Telecommunications

Mining and Resources

Relevant Teams

Legal

Compliance

Corporate Secretariat

Investment Management

Corporate Finance

Wealth Management

Corporate Governance

Risk Management

Private Client Services

Trust Administration

Relevant Roles

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

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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