Why use a shareholders’ agreement? Corporate & Commercial

A shareholders’ agreement sets out the rights and obligations of shareholders, how the company will be run, how important decisions are to be made, regulates the transfer of shares in the company and protects the individual shareholders’ interest in the company.

A well-drafted agreement can establish a common understanding among shareholders’ in terms of what they will be expected to offer and get from the business and how shares can be dealt with.

This should assist in avoiding acrimonious, future disputes or at least set out some ground rules that will apply if shareholders fall out in the future.