Full Ratchet Anti-Dilution, a form of economic dilution protection, gives an investor the right to buy shares at the new lower price/valuation and offers the greatest protection for investors, but is most restrictive when there will be multiple rounds of fundraising. The preferential subscription right, the most fundamental and common form of dilution percentage protection, gives shareholders the right, but not the obligation, to purchase in the future new shares issued by a company on a pro rata basis in order to maintain their proportional ownership of shares. This right may apply to all classes of shares or only to certain classes of shares. 8.3 The transfer of shares also includes the transfer of shares to holding companies. The transfer of shares in holding companies must therefore, as far as possible, follow the provisions of the shareholders` agreement. The transfer of shares in a holding company to a company of which one party is solely owned or to a party in person is not subject to this provision, provided that that company or party adheres to the shareholders` agreement. In most cases, unless, for example. B the outgoing shareholder owes a debt to the company, the outgoing shareholder must be compensated for his shares. The company may provide for its right of pre-emption for shares, a procedure if it does not wish to do so and the way in which the share price is calculated, for example. B by appointing a neutral expert to determine fair value or otherwise. Such procedures prior to the occurrence of such involuntary transmission events are capable of enabling the undertaking to continue its activities without interruption. In the shareholder agreement or articles of association, the company may require shareholders to impose the sale of their shares in the event of a particular event.
Some of these “triggering events” may be: Another subsection of transmission that should be considered is insurance. In order to ensure that all or a substantial part of the purchase price is available for a shareholder`s shares, the company may (but is not obliged to) take out and acquire life insurance for a shareholder. For example, after the death of an insured shareholder, the company – which would be the sole owner of the policy – would recover the proceeds of the policy, which would be payable due to the death of that shareholder, and pay the proceeds necessary to redeem shares at the purchase price and retain the surplus. . . .