A share entrustment agreement is a formal document made between a corporation and certain registered shareholders of the company whereby the “dummy’ shareholders are entrusted with the shares owned by a major shareholder, that is, they own another shareholder’s shares in the company and on his behalf for a specific period of time. The share entrustment agreement must contain the name and address of the company and the shareholders involved in this, the percentage of shares owned by each shareholder, the date and place of creation of this agreement, how long this agreement will be valid and conditions under which it will be terminated..
The shareholders also have to present or acknowledge certain financing documents in the agreement, for example, the exclusive consulting and service agreement, share disposition agreement, share pledge agreement, business operation contract, power of attorney between the dummy shareholders and so on. All parties must agree to the terms and conditions of the agreement for it to become effective.
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Sample Share Entrustment Agreement
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