GREEK LAW DIGEST

195 Dryllerakis & Associates Law Firm Shareholders Agreement is a contract between specific (or all) shareholders that defines the relations between themselves. The Articles of Association bind all the shareholders as well as third parties that have any relation with the Company, whereas the Shareholders Agreement is binding only between the parties (shareholders) that have signed it. As a practical consequence, any violation of the Articles of Association could lead to nullity of any action whereas any violation of the Shareholders Agreement will lead to liability vis-à- vis the shareholders that have signed the Agreement. What type of clauses do the Shareholders Agreements usually have? A shareholders Agreement can have any clause (in theory) as a civil law contract. The main cat- egories are the following: a) the way the Company works (i.e. Board of Directors/ Meetings of Shareholders/Administration), b) specific rights linked to the transfer of the shares (First Refusal Right, Put Option, Call Option, Tag Along, Drag Along etc), c) specific rights of shareholders (for example information request, etc), d) competition issues (usually obligation not to compete to the extent tolerated by the relevant legislation). Of course the above list is not exhaustive. Could you explain the different rights linked to the transfer of the Shares? The first typical clause is the First Refusal Right: any shareholder that wishes to sell his/ her/ its shares must first offer them to the other parties. In most cases the exact procedure is described in details in the Shareholders Agreement. Another right is the Put Option: a specific shareholder has the right to offer its shares to another shareholder(s) at a specific time frame and the other shareholder(s) has (have) the obligation to buy. The Call Option is exactly the opposite: a specific shareholder has the right to ask to buy the shares of another shareholder(s) at a specific time frame and the other shareholder(s) has (have) the obliga- tion to sell. The Tag Along is a right to protect a “minority”shareholder: if the majority share- holder wishes to sell its shares to a third party then the minority shareholder (who has the right to tag along) can ask and the majority shareholder has the obligation to sell the shares of the minority shareholder. On the opposite direction, the Drag Along right is a right to protect the “majority” shareholder: if the majority shareholder wishes to sell its shares to a third party then he can ask the minority shareholder, and the minority shareholder has the obligation to, sell his or her shares along with the majority shareholder. These are the com- mon and typical rights but the parties (shareholders) are free to define their meaning as well as their relationship in general as they want, describing other rights and possibilities. Why not have the above clauses in the Articles of Association? Various reasons dictate the inclusion of a provision in a Shareholders Agreement and not the Articles of Association. First in the law may not allow a regulation like the one the par- ties wish e.g. the way the Board of Directors is elected and its composition. Secondly, confi- dentiality issues: the Articles of Association can be viewed by all the shareholders and third parties, and it is valid for all shareholders. With the Shareholders Agreement you can define the relations between certain shareholders (and only between them). Thirdly there is a limit to what you can put in the Articles of Association: even though L.4548/2018 has expanded the list of what can be actually inserted in the Articles of Association, there are still provi- sions that might prove problematic if inserted in the Articles of Association.