The hard rights of the first refusal require licensees to first solicit a good faith offer from a third party before the shares are offered to other shareholders of the company. This can complicate the sale of shares, as few third-party investors want to try to make an offer to get nothing. The flexible rights of the first refusal require the selling shareholder to first make an offer to other shareholders and, if they refuse to buy, the shares can then be offered to third parties. It should be noted that the right of refusal applies to all shareholders or to a subset of all shareholders (i.e. the founders). To better understand, it is necessary to examine the importance of the Put option. A put option, as it is understood in common language, is an option for sale. A put option is an investor`s exit/liquidity option, which allows an investor to compel the company`s promoter/shareholder to buy all or part of its shares at an agreed valuation between the parties. A put option became a popular exit option in business practice and found the expression by the way was a put option clause in Share Holders Agreement (SSA) or Share Subscription Agreements (SHA). This right of sale is not legally a shareholder, but a contractual agreement between the parties. Therefore, if Put Option is not provided for by the SSA or SHA, the investor/shareholder cannot exercise this right of sale. The legality of Put Option can only be questioned if a contract offering the investor the opportunity to sell his shares to the developer at a later fixed counterparty is equivalent to a futures contract prohibited by the Securities Regulation Act of 1956.

For a complete understanding of this issue, it is necessary to examine the concepts of limiting the transfer of shares, i.e. the futures contract, i.e. the cash supply contract, the applicability of SCRA to limited companies, publicly traded companies, unlisted public companies. In order to reinforce the presentation, this edition is treated from the point of view a) Private Limited Companies, b) Listed Public Limited Companies and c) Unlisted equity companies. The first possibility of terminating a shareholder contract is consensual. Second, all shareholders decide that they no longer want to comply with the shareholders` pact for various reasons. The reasons may be that the company is dissolved, that its shares in the company or the company itself are sold or that it decides to leave the company. These provisions should be included in a well-developed shareholder pact. However, a shareholder contract cannot be invoked if there is no partnership agreement under the Partnership Act 1890. One of the main factors in a shareholders` pact is the ousting of shares and equity.

This area of the agreement must be treated with caution and diligence in order to create the fairest agreement between shareholders in accordance with their responsibilities within the company and how much they have invested in the company. In strict legal theory, the relationship between shareholders and those between shareholders and the company is governed by the company`s constitutional documents. [Citation required] However, for a relatively small number of shareholders, such as in a start-up, it is common in practice for shareholders to complete the constitutional document. There are a number of reasons why shareholders want to supplement (or take over) the company`s constitutional documents: even if there is no legal obligation to have a shareholders` pact, it is strongly recommended to do so, as it protects shareholders from possible conflicts.