Drafting Drag along Triggers in International Shareholders Agreements
Drafting cross-border drag-along triggers requires verifiable voting thresholds, explicit cash valuation floors, and deeded power-of-attorney execution clamp mechanics.
Attorney-in-Fact
Meaning
Designated agent authorized to perform legal or financial acts on behalf of a principal under a written mandate. The attorney-in-fact holds the power to sign documents and bind the principal to agreements within the specific limits defined in the power of attorney instrument.
Execution Authority
Every action taken by the agent must align with the written instructions provided in the authorizing document. The attorney-in-fact signs deeds and contracts by indicating their status as an agent to prevent personal liability for the underlying obligations. Because the power is derivative, the agent cannot exceed the scope of the original mandate without risking a breach of duty.
Fiduciary Duty
The agent owes a strict duty of loyalty and care to the principal throughout the duration of the appointment. This obligation requires the attorney-in-fact to avoid conflicts of interest and act in the best interest of the principal during every transaction. They must maintain accurate records of all dealings and provide a full accounting of activities whenever requested by the principal or an authorized auditor.
This transparency ensures that the principal can verify the management of their assets and detect any unauthorized activity. The duty persists until the mandate is revoked or the principal loses the capacity to oversee the agent.
Mandate Termination
The authority of the agent ceases immediately upon the death of the principal or the formal revocation of the power. Any acts performed after the attorney-in-fact receives notice of termination are void and may lead to legal claims from third parties.