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In this agreement, most of the important rights of the holders of securities are linked to their proportional ownership. Second, the CDA provisions can ensure that funds are used for tax efficiency purposes. For example, the donation of non-profit life insurance in the company`s property can sometimes include the donation of shares of private companies, which will then be cashed out by the company`s board of directors. This repayment translates into a supposed dividend. In the current circumstances, the accepted dividend should not be declared as a capital dividend, although the deceased intends to donate the proceeds of the life insurance to charity. Proper planning would ensure that the tax-free nature of capital dividends is not “wasted” on a tax-exempt non-profit organization. An important question is whether the agreement should contain mechanisms to deal with such a situation. This Agreement does not contain detailed provisions concerning the establishment of audited and/or management accounts or the provision of financial information to investors. In addition, the needs of potential beneficiaries must be balanced with the needs of the company and the remaining shareholders.

A transfer of shares to the beneficiaries of an estate may be necessary where there is a liquidity problem with the company or other shareholders and the shares cannot be withdrawn by the company, bought for deletion or purchased by the other shareholders. If a shareholder agreement provides that the acquisition of the shares by the corporation or by the other shareholders can be satisfied by a debt voucher paid over several years, will dependent beneficiaries with sufficient income be left for the years in which the debt note is not paid? In addition, a deceased person may wish that beneficiaries receive regular dividends as direct shareholders or as beneficiaries under a trust that is a shareholder of the company.. . . .