PROFILE OF THE SPEAKER:
Mr. Ravi Shankar Devarkonda, a Chartered Accountant and Company Secretary by profession is a domain expert in the field of finance and secretarial practices. He is the Chief Financial Officer (CFO) of Nandi Infrastructure Corridor Enterprises Ltd, Kalyani Group and is also a registered Valuer as per Insolvency and Bankruptcy Code of India.
ABSTRACT:
A shareholders’ agreement is an agreement among the shareholders of a company. It protects both the business and its shareholders. A shareholders’ agreement describes the rights and obligations of shareholders, issuance of shares, the operation of the business, and the decision-making process. While these part-owners earn profit by investing in a company’s stocks, they also play an important role in operating, financing, governing and controlling various aspects of a business. The Shareholders
Agreement is binding only on the parties to the Agreement, and it is a contractual arrangement between the parties. A properly drafted Shareholders Agreement will help to maintain a healthy relationship between the parties.
FLOW OF EVENTS:
So, the session started with the discussion of various topics concerned like:

1. The speaker started by explaining what is share capital, the basic fundamental of a company arrangement and what is a share agreement.
2. Next, he jumped onto Due Diligence(DD) procedure and it types which are: Legal DD, Technical DD and Administrative DD
3. Then comes Pre Negotiation Stage, wherein the first process is
   – Commercials: Commercials are foundation of all commercial contracts and the legal clause only supplements it.
   – Letter of Intent/ MoU/ Term sheet
   – Negotiation: The art of arriving at a consensus between two parties.
4. Next comes drafting a Shareholders Agreement (SHA) , Drafting is done keeping in
   mind two clauses – Generic clause and Common clause.
5. The speaker briefed about what are the key consideration area of SHA, that are:
   – Regulatory Framework
   – Commercial Consideration
   – Transfer provision
   – Equity Shareholding pattern
   – Minority rights protection
6. Then he explained the Key Clauses under Shareholding Agreement:
   – Anti Dilution Right
   – Quorum Right
   – Veto Right/ Affirmative Right
   – Share Transfer restriction Right
   – Tag along Right
   – ROFR (Right of First Refusal)
   – ROFO (Right of First Offer)
   – Drag along Right
   Exit Rights:
   i) IPO
   ii) Third party sale
   iii) Share Buy Back
   iv) Sale of assets and liquidation.
7. Then he explained the concept of Deadlock; Deadlock can occur both at the Board as well as at the shareholder level.
8. Then he talked about Veto Rights and its matters, which are
   – Takeover of new Business
   – IPO
   – Amalgamation, M&A, Reorganisation and consolidation
   – Appointment/Removal of company auditors.
   – Modification in MOA and AOA
   – Any change in composition of Board of Director

LEARNINGS FROM THE EVENTS:
The session was insightful and full of learnings as we were able to understand the fundamentals of share agreement, basics of secretarial practices and company working and got to know a lot about the rights governing minority shareholders