Shareholder Agreements – Why to have one and what types of matters should they address?
A shareholder agreement is basically a contract that outlines the rights, responsibilities, and obligations of the shareholders of a company. This type of agreement is used to govern the relationship between the shareholders and provide a framework for decision-making and dispute resolution. This article shall address the reasons why shareholders of a company may decide to enter into a shareholder agreement as well as the types of issues and topics which should be covered in this type of contract. Reasons why to have a Shareholder Agreement Some of the key reasons as to why shareholders may decide to use this type of contract are as follows: Arguably, one of the main reasons is to protect certain shareholder rights. A shareholder agreement can protect the rights of minority shareholders by setting out provisions for voting rights, dividend distribution, and access […]
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