Shareholders Agreements with Precedents Online. Download in word format, save and reuse as many times as you need.
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Appointing a Director
Deed of Accession
Agreement Covering Funding
Minority Shareholder Agreement
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A shareholder agreement is a contract between the shareholders of a company. Without a shareholders agreement, the relationships among shareholders are regulated by the constitution of the company. Every company has a constitution. Not all companies have a shareholders agreement.
The shareholder agreement works together with the constitution. Shareholders sometimes update or amend the constitution of the company when adopting a shareholders agreement. A shareholders’ agreement is confidential between the parties.
The constitution of a company may not provide sufficient protection for minority shareholders. Minority shareholders can protect their position by using a shareholders’ agreement.
Shareholders’ agreements vary enormously. In a characteristic joint venture or business start-up, a shareholders’ agreement would normally be expected to cover the following matters:
the nature and amount of initial contribution (whether capital contribution or other) to the company
the proposed nature of the business
how any future capital contributions are to be made
regulating the ownership and voting rights of the shares in the company, including
restrictions on transferring shares, or granting security interests over shares
pre-emption rights and rights of first refusal in relation to any shares issued by the company (often called a buy-sell agreement)
“tag-along” and “drag-along” rights
minority protection provisions
control and management of the company, which may include
power for certain shareholders to designate individual for election to the board of directors
imposing super-majority voting requirements for “reserved matters” which are of key importance to the parties
imposing requirements to provide shareholders with accounts or other information that they might not otherwise be entitled to by law
making provision for the resolution of any future disputes between shareholders
dispute resolution provisions
the governing law of the shareholders’ agreement
allocation of key roles or responsibilities
Drag-Along Right assures that if the majority shareholder sells his stake, minority holders are forced to join the deal. This right protects majority shareholders. Drag-along rights are fairly standard terms in a stock purchase agreement. Drag-along rights typically terminate upon an initial public offering.
Tag-along right assures that if the majority shareholder sells his stake, minority holders have the right to join the deal and sell their stake at the same terms and conditions as would apply to the majority shareholder. This right protects minority shareholders. Tag-along rights are fairly standard terms in shareholders agreements.
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