Shareholders agreement

We typically draft one or more shareholders agreements for our clients, depending on the company’s complex management structure. We provide a style that’s suitable for the company, tailoring the content to the realities of startup companies and reflecting the company’s in-depth management structure.

The shareholders agreement may set forth the responsibilities and limits of the directors, management, and the board.

What should be included in a shareholders agreement 

Different shareholders agreements say different things on specifics concerning their particular situation. However, they all usually include the following which are among the most important elements: 

• Devise a strategy for the type of company, defining top management, how they are to be compensated 
• Regulate the duties of top management
• Establish the directors
• Set mandatory or voluntary shareholders’ meetings
• Designate the veto power of the shareholders
• Select the management or leave the choice to shareholders
• Define a shareholders’ meeting
• Determine how shares are to be issued
• Decide whether shares split or transfer to another company
• Propose a plan if the company ever needs to be dissolved
• Decide procedures for raising capital, dividends, and distributions

Why is it important to have a shareholders agreement? 

A shareholders agreement can reduce conflict between shareholders and managers in two ways: first by providing for a shareholder’s veto power; second by requiring shareholders to approve big decisions and significant transactions like mergers and capital investments, borrowing, shareholder sales, and executive compensation.

We can help with both reviewing and amending an existing agreement and drafting a new one. To get a quote, simply click here.