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Non Compete Clause In Shareholders Agreement Template for Switzerland

A comprehensive non-compete clause integrated within a shareholders agreement, governed by Swiss law, designed to protect company interests while maintaining compliance with Swiss legal requirements. The document establishes restrictions on competitive activities by shareholders, defining the scope, duration, and geographical limitations of these restrictions in accordance with Articles 340-340c of the Swiss Code of Obligations. It includes specific provisions for enforcement, consideration, and exceptions, while ensuring alignment with Swiss constitutional principles of economic freedom and competition law.

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What is a Non Compete Clause In Shareholders Agreement?

The Non Compete Clause In Shareholders Agreement is a crucial component of shareholder arrangements in Swiss corporate governance, typically implemented when companies seek to protect their legitimate business interests from competition by their shareholders. This document is particularly relevant in scenarios involving closely-held companies, startups, or businesses with significant intellectual property or trade secrets. Under Swiss law, such clauses must be carefully drafted to balance the company's protective interests with the constitutional right to economic freedom. The agreement typically includes specific temporal and geographical limitations as required by Swiss law, detailed scope of restricted activities, and appropriate consideration mechanisms. It's essential for companies with multiple shareholders, especially those with access to sensitive business information or strategic plans.

What sections should be included in a Non Compete Clause In Shareholders Agreement?

1. Parties: Identification of all shareholders and the company subject to the agreement

2. Background: Context of the agreement, including company details and purpose of the non-compete provisions

3. Definitions: Key terms used in the agreement, including 'Competitive Activity', 'Territory', and 'Confidential Information'

4. Scope of Non-Compete: Detailed description of prohibited competitive activities and business areas

5. Duration: Time period for which the non-compete obligations remain in force

6. Geographic Scope: Specific territories where the non-compete restrictions apply

7. Consideration: Compensation or consideration provided in exchange for the non-compete obligations

8. Exceptions: Permitted activities and circumstances where restrictions don't apply

9. Enforcement: Mechanisms for enforcing the non-compete provisions, including remedies for breach

10. Severability: Provisions ensuring remainder of agreement remains valid if any part is found unenforceable

11. Governing Law and Jurisdiction: Confirmation of Swiss law application and jurisdiction for disputes

What sections are optional to include in a Non Compete Clause In Shareholders Agreement?

1. Post-Exit Obligations: Specific provisions applying after a shareholder exits the company

2. Carve-outs for Existing Businesses: Exceptions for pre-existing business interests of shareholders

3. Special Provisions for Management Shareholders: Additional obligations for shareholders who are also managers

4. Garden Leave: Provisions for paid non-compete period after active involvement ends

5. Assignment and Transfer: Rules regarding transfer of non-compete obligations in case of share transfers

6. Monitoring and Reporting: Procedures for monitoring compliance with non-compete obligations

What schedules should be included in a Non Compete Clause In Shareholders Agreement?

1. Schedule 1 - Restricted Territory: Detailed map or list of geographic areas covered by non-compete

2. Schedule 2 - Restricted Business Activities: Comprehensive list of specific prohibited business activities

3. Schedule 3 - Existing Business Interests: Declaration of shareholders' current business interests that are excluded

4. Schedule 4 - Consideration Details: Specific terms of compensation or consideration for non-compete obligations

5. Appendix A - Compliance Certificate: Template for periodic certification of compliance with non-compete obligations

Authors

Alex Denne

Head of Growth (Open Source Law) @ 黑料视频 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Switzerland

Publisher

黑料视频

Cost

Free to use

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