The association contract can, in principle, provide for everything that members wish to provide and each association contract is drawn up separately for each closed company. We strongly advise 20 peddling to find examples on the Internet or elsewhere, and then to “cut and insert”. There are certain requirements that must be included in the association agreement to make it a useful and valid agreement. The circumstances in which members may be held liable in their personal capacity, even if they have not signed a guarantee, are the following paragraphs of the Close Corporations Act (`Law`): there should be a separate buy-back or redemption clause, and members should take instructions on the life of the other to make arrangements when a member leaves Close Corporation , either by resignation or by death. (The association agreement will give preference to a cash buyback agreement to ensure that there is no conflict between the two agreements).) One of the most important issues that needs to be addressed in an association agreement is what should happen when a member wishes to leave close corporation and dispose of his shares. The same applies to the death of a member. In addition, the agreement must determine what will become of the member`s interest if members decide to close (disinscribe) or sell the Close Corporation. By “What should happen with the interest of a member,” we believe that the value of interest must first be determined; the agreement defines how this value is determined and the exact time to determine that value (for example. B on the day of resignation, the day before death) and by whom the value is determined. Why do I need a convention? If your company is a two-member closed company, a written contract between members may be considered.
An association agreement defines, among other things, the procedure to be followed when a member wishes to interest its members, when decision-making is blocked, when a member is seized or commits an offence, and guidelines for credit accounts. The Association Agreement is an agreement like any other and must be signed by all contracting parties.