A shareholders` agreement, sometimes called a shareholders` agreement, is a document between a company and its shareholders. In a shareholders` agreement, the company and the shareholders agree on the limits of the relationship between them. Under these agreements, the company sets its expectations for shareholder behaviour and obligations, and shareholders define the entity for the company`s key players – among these key players are the shareholders themselves, senior managers and directors. You might want to define specific tasks that each shareholder has and what constitutes a shareholder. For example, in this draft shareholders` agreement, a fictitious company is incorporated as the property of its former car and other companies and people. An Executive Board of Directors is formed and a CEO, CFO and COO are appointed. Simply put, a shareholders` agreement is a written contract between the investors of a company. The agreement is expected to have similarities to the “articles of association,” but the difference is that, in an agreement, shareholders have the power to add anything they want as long as it is within the limits of the law. To give you an overview, a shareholders` agreement deals in principle with the following issues: each shareholder, each minority or majority should have the right to vote in any decision concerning the whole. Even if a majority shareholder has more influence over the voting system, a larger number of minorities who vote under the same conditions may still be able to win the vote.
Growing companies change some things in the system so that their businesses can grow.