It’s not a great practice because most of the time these provisions lead the partners to discuss the causes of the departure, when the only thing that should matter is that the shareholder who is leaving can do so and let a new shareholder enter the share capital, in order to increase the company’s value.
This is why we propose a very simple clause in case of departure. The rationale is as follows: the acquisition of capital is correlated with time spent in the company (vesting compliant with French law).
Therefore, upon the decision of the other partners in a General meeting, the partner and manager who wishes to leave or who is invited to leave, lose his position as manager and will return his shares according to a simple timetable:
Why set the share buyback at nominal value in case of departure? Above all, it’s important to protect the growth of the company and encourage the founding team to stay as long as possible. Future fundraising should not influence a shareholder's decision to stay or to leave. It is the company’s project and the founders that founded the company, not individuals. So if one is leaving, it should be because the team no longer works. The shareholder leaving is thus refunded for what he originally brought i.e, the value of the shares at the company’s formation and the portion of the shareholder's current account.
Obviously, if the shareholder is leaving after behaving with malicious intent, he or she will be required to return 100% of the company's shares he/she owned.
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