Is shareholders' agreement amending company's constitutional documents legally enforceable? if not, what is it real value?

Asked over 1 year ago - Jersey City, NJ

The above assumption based on the below quote from http://en.wikipedia.org/wiki/Shareholders'_agre...

which states:

characteristically, courts will not grant an injunction or award specific performance in relation to a shareholders' agreement where to do so would be inconsistent with the company's constitutional documents.

Attorney answers (4)

  1. Joseph Martin Carasso

    Contributor Level 7

    6

    Lawyers agree

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    Answered . By constitutional documents, I assume you mean the Articles of Incorporation and By-Laws. If all the shareholders enter into an agreement to amend the By-Lawys or Articles, the Courts can enforce the agreement and the By-Laws and Articles can be amended by Court Order. If only some of the shareholders enter into an agreement, the Courts may or may not enforce it. The Courts would have to consider all the shareholders and their rights before enforcing any agreement.

  2. Norman Antonio Stiteler

    Contributor Level 15

    5

    Lawyers agree

    Answered . I agree with my colleague, Attorney Carasso. Look at the articles of incorporation and see if there is a specific process laid out for amending the bylaws and articles, and then determine if they followed them. If you believe that they didn't then I would suggest seeing an attorney to review what your legal alternatives are.

    I am licensed in New Mexico and Pennsylvania, and therefore any discussion of issues related to other states must... more
  3. Raymond Andrew Grimes

    Pro

    Contributor Level 18

    3

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    Answered . I agree with both of my colleagues. You have to read the articles of incorporation and bylaws to make a determination as to whether it was done properly. However, shareholders can always agree to amend them.

    Attorney answers to questions are for general purposes only and do not establish an attorney-client relationship.... more
  4. John P Corrigan

    Contributor Level 19

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    Best Answer
    chosen by asker

    Answered . You ask an excellent question but fail to give any context as to what is in the Shareholder Agreement that's inconsistent with the Articles of Incorporation. Whether the S/H Agreement is consistent or inconsistent or in fact an elaboration is itself an interpretative issue. Normally you an think of the Artilces of Incorporation as being a skeleton and a S/H Agreement as adding meat to the bones...but is connected and not distinct. Accordingly, my viewis that a S/Hagreement supplements NOT amends the Articles of Incorporation which can only occur with the filing of an Amended Articles of
    Incorporation.

    My answer is not intended to be giving legal advice and this topic can be a complex area where the advice of a... more

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