Do you want to avoid problems with your partners and guarantee the continuity of your company? You must know what partners’ agreements are and what types exist. In this post, we tell you all the details.

What is a partners agreement?

A partners’ agreement or shareholders’ agreement is a contract entered into by some or all of the partners of a capital company in order to specify or modify the legal and statutory rules that govern internal relations within the company.
It is important to note that the partners’ agreement refers to the internal relations between the partners since the characteristic of partners’ agreements is that they are not integrated into the legal entity to which they refer, but into the relationships of those involved.

What types of partners’ agreements exist?

According to a fairly widespread classification among different authors, the agreements that make up a shareholders’ or partners’ agreement can be grouped into three categories:

  • Relationship agreements: these agreements are neutral with respect to the company, that is, they do not affect the company positively or negatively. These agreements regulate the reciprocal relations of the partners directly and without the mediation of the company, for example, agreements for preferential acquisition rights on some company shares in the event that one of the partners decides to sell.
  • Attribution agreements: are those that are designed to attribute advantages to the company itself, for example, agreements on additional financing by the partners.
  • Organisation agreements: this classification includes agreements that may be more contentious at the corporate level. These agreements are used by the partners to regulate the organisation, operation and, ultimately, the decision-making system within the company, for example, agreements on quorums and majorities necessary for decision-making.

What are the effects of the partners’ agreement?

Partners’ agreements are enforceable inter partes (between the parties, in this case, between the signing partners), which means that they are the law between those who sign them, however, problems can arise with the agreement in relation to the company or partners who have not signed the agreement.
Consequently, various authors have analysed the types of partners’ agreements that we have seen and whether they can have value only between the parties or also against third parties. The authors consider that:

  • Attribution agreements are what crosses the border between parts and can be claimed by the company itself since they offer certain advantages to it (for example, additional financing).
  • We find that the same applies to relationship agreements since they are framed within the private relationships of the partners.
  • Regarding the enforceability of organisation agreements, the authors, in general, consider that they do not affect the company or the rest of the partners who have not signed the shareholders’ agreement.

Examples of partners’ agreements that can be regulated

Based on this analysis, we can present a non-exhaustive list of examples of partners’ agreements as follows:

AGREEMENT TYPE DESCRIPTION
RELATIONSHIP AGREEMENTS Preferential acquisition rights over the shares. A preferential purchase right is granted to one or more of the partners with respect to company shares.
Joint selling rights. This pact includes the tag along, by which the partner who has this right, obliges whoever has the obligation, that, in the case of a possible buyer of the company shares, they will accompany the one who negotiates with the potential buyer.
Lock up obligations. This is a clause which tries to prohibit the entrepreneur partners from selling their participation while the investment partners remain in the company. They refer to those companies where one of the partners is simultaneously the founder or a key worker.
Obligation on a partner not to increase their participation in the capital above a certain percentage. Also known as non-aggression pacts.
Obligations not to assign or acquire the shares under certain conditions.
Clauses to cover the losses of some partners by others.
Dividend-sharing clauses.
COVENANTS OF ALLOCATION Additional financing obligations. Agreement by which the partners (one, several or all), must finance the company through the chosen figure, loan, supplementary contribution, reintegration of social assets in case of losses, etc.
No competition between the partner/s and the company.
Granting of exclusivities and intermediation in the products / assets of any of the partners.
Preferential acquisition right. Unlike the same right within a Relationship Agreement, this right is held by the company against the partner / s who are preparing to sell their participation.
Obligations to assign or acquire the shares under certain conditions provided that they benefit the company.
ORGANISATION AGREEMENTS Interpretative agreements of the bylaws.
Agreements on the composition of the administrative body.
Agreements on the policies to be pursued by the company. This can include the business plans, the financing scheme or the dividend policy. With respect to dividend policy, one can differentiate between:
– Relationship agreements, which determine how dividends should be distributed (for example, it can be agreed that some partners gain a higher share percentage than others)
– Organisation agreements, which state whether or not dividends must be distributed.
Covenants restricting the powers of administrators.
Arbitration agreements which apply in a situation of blockage or deadlock. This is an agreement in which one or more partners / external persons will have a casting vote.
Covenants on the information to be given to partners.
Pacts on quorums and majorities.
Covenants on minority rights.
Covenants on the regime of statutory modifications.
Joint sale agreements. This agreement includes the drag along, by which the partner who has this obligation (normally a minority), is obliged to sell his shares to a third party who wants to buy the shares and negotiates with the partner who has this right (usually a majority), and the minority party is prevented from blocking the sale of the entire set of shares.

As you have seen, there are many possibilities and the objective is to avoid conflicts between the partners that cause blockages.

For the partners’ agreement to be truly operational and effective, it is important to seek advice from a specialist who fully knows the possibilities and knows how to reflect the client’s will in the partners’ agreement.

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