A shareholder agreement is an agreement put in place between the shareholders of a company. Depending on the specific nature of its contents, a shareholder agreement can also go by the name of an “investment agreement”; a “subscription agreement” or a “joint venture agreement”. What all of these agreements have in common is that they regulate the relationship between the shareholders (and typically the directors) of a company.
Key areas a shareholder agreement typically covers include: -
The answer to that is yes, if you do not have a shareholders agreement.
But, by having a shareholders agreement in place you can override or adjust the position of the company law rules. For example, if you are a minority shareholder in a company, company law rules say that you only have limited rights and powers of control in relation to your company. Whereas, a shareholder agreement can be drafted to give minority shareholders greater protection than company law rules provide on their own.
Likewise, if you are a majority shareholder, you may want to place more onerous obligations and restrictions on a minority shareholder than that provided by company law rules alone.
The types of documents that are required to implement shareholder arrangements include:
Once you have an idea of the points and issues you want to include in a shareholder agreement, the shareholders agreement itself (together with the supporting documentation to implement the arrangements) can be produced in a few days. Timing can be affected by any points and issues that need to be negotiated between the shareholders.
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