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Shareholder Agreement basics

When shareholders in a business want to create rules about how their company is run, a Shareholder Agreement is a smart way to get everything in writing. Avoid potential disputes and set up your business for success by making sure all the shareholders see eye-to-eye on all the details.

Use the Shareholder Agreement document if:

  • You are forming a business with more than one investor and you want to clarify how the business will run
  • You want to create rules for how your business will deal with any disputes between owners
  • You are a shareholder and want to protect your interest in the company

A Shareholder Agreement is a contract between the shareholders of a corporation, which defines the roles of shareholders and specifies duties the corporation has to them. Use this agreement to name a managing shareholder, and define what corporate actions require the consent of the shareholders. You can also create rules around the appointment and termination of officers, specify what earnings must be passed to the shareholders as dividends, and agree on what actions officers and shareholders may make on behalf of the corporation. Finally, the shareholders can agree to limitations on the sale of stock, and the conditions that must be met to dissolve the corporation. In short, our Shareholder Agreement allows your business to run smoothly, and sets expectations when challenges arise.

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Sample Shareholder Agreement

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