An association agreement performs the same functions as a memorandum of Incorporation of a company and therefore requires careful balancing and commitment between the Close Corporation, its members and the author of the association agreement. In the event of a disagreement, each member may convene a meeting with the necessary notification for such a meeting. The quorum required at the meeting is 75% of the total membership. When the quorum is reached, 75% of the members present must vote in favour of the sale or purchase. Do you want to sign a new association treaty? There are good reasons to do so. It regulates the relationship between members of a close company. He tries to make sure that you are still talking to each other after a few years. It is important that members of a close company sign an association contract, preferably at the beginning of their relationship. Read our mother of all quarrels to find out why.
In principle, an association agreement will prevent disputes and conflicts in the future. What does the agreement say? This draft association agreement consists of: interpretation; Introduction; The creation of the Corporation; Members` assemblies; Issues that require unanimous agreement; Corporation`s funding; Managing the company Evaluation Life insurance The value of transferring members Forced sale; Disputes addresses and communications Good faith; Confidentiality general. What is the deal? The agreement can be printed on eight pages. The Association Agreement is an agreement like any other and must be signed by all contracting parties. It must be signed on each side by each member and by the witnesses, and the last page must be fully signed. Make sure that each member has a copy of the agreement and that the original is kept safely, preferably outside the premises. In the event of disagreement among the members of the Committee, the possibilities are relatively limited. If there is an association agreement, it can be settled by that agreement. Otherwise, it is possible for minority members to file a motion within the meaning of section 49 of the Act, under which the court may order the correction of the minority member`s complaint (this is not an easy route). In addition, a member may, in the appropriate circumstances, file a request for liquidation of the General Committee. The Association Agreement essentially establishes all the rights and obligations of each member. It determines the percentage of membership in the Close Corporation of each member, what each member can and cannot do, can and can obtain voting rights, basically everything that governs the agreement between members and close corporation.
The Association Agreement is the most important document of close corporation and, therefore, the only document that must be in order. There are some things that need to be contained in the agreement, so be sure to use a professional person to design the same thing.