MACAU SAR, CHINA Law and Practice Contributed by: João Nuno Riquito, Bruno Almeida, Belmiro Leong and Kimberley Cheong, Riquito Advogados
1.7 Shareholders’ Agreements/Joint Venture Agreements Shareholders’ agreements and joint venture agree- ments are commonly used for private companies. Please see 1.8 Typical Provisions in Shareholders’ Agreements/Joint Venture Agreements for more detail. 1.8 Typical Provisions in Shareholders’ Agreements/Joint Venture Agreements By entering into a shareholders’ agreement, share- holders can undertake to act in a manner that is not prohibited by law; namely, in respect of the exercise of the right to vote. However, they cannot validly agree to determine the actions of the company’s directors or supervisory bodies. The agreement is effective between the signatory shareholders but does not bind the company, meaning that shareholders can- not challenge the company’s actions or the actions of shareholders vis-à-vis the company on the grounds that they breach their agreement. Shareholders’ agreements are null and void if, by vir- tue of them, a shareholder undertakes to: • always vote following the instructions of the com- pany or of one of its bodies; • approve their respective proposals; or • exercise the right to vote, or abstain from exercis- ing it, in return for a special advantage (Section 185). Investors may also enter into joint venture agree- ments of different types. Besides incorporated joint ventures (where investors pursue their business goals as company shareholders), investors may start unin- corporated joint ventures in the form of a consortium ( consórcio , in which two or more business persons or companies undertake to perform a certain action or make a contribution, with the purpose of executing a certain enterprise, providing goods to third parties, researching natural resources, etc) or an association in partnership ( associação em participação , in which an individual or entity associates with another’s busi- ness enterprise, participating in the latter’s profits or profits and losses). These are regulated in Sections 528 to 562 of the MCC. Only a consortium is subject to written form.
Both shareholders’ agreements and joint venture agreements are enforceable in case of breach. Pur- suant to the provisions of Sections 807 to 821 of the Civil Code, a lawsuit may be filed against the breach- ing party with the goal of enforcing the agreement or seeking adequate compensation. Generally, both types of agreement are confidential. 2. Shareholders’ Meetings and Resolutions 2.1 Types of Meeting, Notice and Calling a Meeting It is mandatory to hold an annual general meeting within the first three months after the closing of the business year in order to resolve on the following mat- ters: • approval of the balance and of the profit and loss account; • approval of the directors’ report; • allocation of the results of the business year; and • election of the members of the board of directors and the supervisory board. The calling notice must contain the following: • the company’s name and registered office, and the registration number with the Commercial and Movables Registry Office of Macau; • the location, date and time of the meeting; • the type of meeting; and • the agenda, with details of the topics that have to be decided by the shareholders. The notice must also state that the relevant docu- ments are available at the company’s registered office or, when it is permitted by the articles of association, on the company’s website for the shareholders to check (Section 222, paragraph 2). Please refer to 2.4 Information and Documents Relating to the Meeting for more detail. If the calling notice is not signed by the chair or any other person with capacity to do so, or if it does not refer to the date, time, location or agenda, the meeting
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