What is the agreement? The agreement can be printed on eight pages. Would you like to sign a new association agreement? There are good reasons for this. It regulates relations between members of a company of close capital. He tries to make sure you still talk to each other after a few years. It is essential that members of a company of close capital sign a contract of association, preferably at the beginning of the relationship. Read our article Mother of all disputes to find out why. Essentially, an association agreement prevents disputes and conflicts in the future. The Association Agreement is an agreement like any other and must be signed by all parties. It must be initialled from each page by each member and witness, and the last page must be fully signed.
Make sure that each member has a copy of the agreement and that the original is kept safe, preferably off-premises. In principle, the association agreement can provide for anything that the members wish for it and each association agreement is drawn up specifically for each Close Corporation. We strongly advise against finding examples on the Internet or elsewhere and then ”cut and insert”. There are certain requirements that must be included in the Association Agreement in order to make it a useful and valid agreement. In case of disagreement, each member may call a meeting by making the necessary announcement at that meeting. The quorum required at the meeting is 75% of the total number of members. When the quorum is reached, 75% of the members present must vote in favor of the sale or purchase. As there is disagreement among Committee members, opportunities are relatively limited. If there is an association agreement, it may be governed by that agreement.
Otherwise, it is possible to lodge an application with minority members within the meaning of section 49 of the Act, according to which the Tribunal may order the correction of the minority member`s complaint (this is not an easy way). In appropriate circumstances, a member may also apply for the liquidation of the CC. What does the agreement say? This proposal for an Association Agreement consists of: interpretation; introduction; creation of the company; Meetings of members; matters that require unanimous approval; the financing of the company; business management; evaluation; life insurance; the transfer of members` interests; forced sales; Disputes; addresses and communications; Faith and faith; confidentiality; Generally speaking. CMSs are governed and regulated by the Closed Corporations Act, 69 of 1984 (as amended) (”the Act”), as well as by all association agreements between the CC and its members. Accordingly, CC members should be aware of this legislation when they act on a daily basis and represent the CC. The Association Agreement is the most important document of Close Corporation and, therefore, the only document that must be correct. There are certain things that need to be in the agreement, so make sure you use a professional person to design it. There should be a clause for a separate purchase and sale agreement or purchase and sale agreement, and members should make instructions for the life of the other to make arrangements in the event of a close corporation member leaving, either by resignation or death.
(The association agreement will favor a buy-back agreement, so make sure there is no conflict between the two agreements). The Association Agreement shall in principle lay down all the rights and obligations of each member. . . .