Latest Industry News

Shareholders Agreement Non Compete Clause Sample

This article gives you an overview of the non-competition clause of a shareholders` agreement, the possible effects of the agreement and the usefulness of legal advice. Mr. Shelmerdine was also a shareholder of Guest Services. The shareholders` agreement imposed competition bans on “shareholders” (including consultants) during their term as shareholders and for 12 months thereafter.2 Guest Services claimed that Mr Shelmerdine breached non-compete rules by requesting transactions from different hotels after the end of its advisory agreement in February 2019. And as in all cases where these are competition agreements or prohibitions on debauchery, applicability depends on the restrictions contained in the agreement. Geographical and temporal constraints are important issues. The creation of a new business and the supply of the same goods or services would clearly constitute competition.

Back to top