The carrying of shares is the agreement by which, the bearer acquires the shares at the request of the principal, it being expressly agreed, that after a certain period of time, theses shares will be retroceded to a designated beneficiary who can be either a third party or the principal himself and for a price agreed in advance.
The carrying agreement allows, on one hand, to discharge the principal of the ownership of the shares for a determined period by transferring them to the bearer, and on the other hand, to assure the principal a certain control on the shares during the duration of the carrying, as well as their appropriation at the end of this period.
1.The parts of the carrying agreement :
- The principal : This is the shareholder who will transfer all or part of his shares to the bearer ;
- The bearer : This is the assignee of shares transferred by the principal;
- The beneficiary of the agreement : This is the person who the bearer will retrocede the acquired shares at the request of the principal, who can be either a third party or the principal.
2.The objectives of the carrying of shares :
- The principal can use the carrying of shares because he doesn’t have sufficient liquidity to own the shares ;
- The carrying of shares can also be a solution for the conflicts between the shareholders in the management of the company ;
In this situation, the carrying agreement consists in transferring the property of a part of the shares to a trusted third party who will play the role of arbitrator until the resolution of the dispute ;
- The principal can also use the services of a bearer if he doesn’t want to reveal immediately his identity of the shareholder of the company.
3.The steps to implement the carrying agreement
- The conclusion of the agreement : The carrying agreement is concluded between the principal and the bearer. The purpose of this agreement is to determine and fix the relations of the parties during the duration of carrying ;
- The acquisition of shares by the bearer : The bearer buys the shares from a third party or from the principal himself, and then becomes a shareholder of the company, in accordance with the conditions initially agreed between the parties ;
- The carrying of shares : During the carrying of shares provided by the agreement, the bearer exercises all the prerogatives attached to the status of shareholder ;
- Transfer of shares to the final buyer : The bearer will retrocede the shares to the final buyer at the price fixed in advance in the contract. The final purchaser can be the principal or a third party defined in the carrying agreement.
Written by Nezha BELKHADIR Legal Manager