A shareholders' agreement should define how shareholders exercise rights, make decisions, transfer shares, fund the company and resolve disagreements.
Common clauses
- ownership percentages
- voting rights
- board representation
- reserved matters
- funding obligations
- issue of new shares
- pre-emption rights
- transfer restrictions
- right of first refusal
- tag-along and drag-along rights
- deadlock resolution
- dividend policy
- confidentiality
- founder exit
- death or incapacity
- dispute resolution
The Companies Act recognizes agreements among shareholders concerning management, operation and voting rights. Such agreements bind the parties, but provisions adverse to the company or minority shareholders are ineffective to that extent.