- Shareholders may bind themselves in a shareholder agreement to vote in a specified manner regarding specific matters.
- Examples might include places on the board of directors, declaration of dividends, etc.
- Individual shareholders may also enter into voting agreements with each other as to particular matters. For example, several minority shareholders might enter into an agreement to vote as a block in order to maximize their voting power, ensure a place on the board of directors, or achieve some other object. Such agreements are expressly provided for by statute.
What is a Voting Agreement?
A voting agreement must be in writing” and filed with the corporation subject to shareholder inspection, and may be specifically enforced.
Voting agreements, particularly those that bind all shareholders, may be a powerful and effective mechanism to prevent specific forms of oppressive behavior. However, such agreements are limited by the ability of the owners to foresee potential problems and the willingness of majorities to have their hands tied in advance.
To discuss your NJ shareholder matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com. Please ask us about our video conferencing or telephone consultations if you are unable to come to our office.
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Shareholder Attorney