A shareholders’ agreement exists for the moment the relationship between shareholders stops working. Companies that skip it, or use a thin template, generally discover the gap exactly when it matters most.
Governance
- Board composition and appointment rights
- Reserved matters requiring more than a simple majority
- Information rights — what shareholders are entitled to see and how often
Transfer of shares
- Restrictions on transferring shares to outsiders
- Pre-emption rights for existing shareholders
- Tag-along and drag-along rights on a sale of the company
Exit and deadlock
- What happens if a shareholder wants to leave
- Valuation mechanism for buying out a shareholder’s stake
- A defined deadlock resolution process, rather than leaving deadlock to end in litigation by default
What to do next
If your company operates without a shareholders’ agreement, or with one that has not been reviewed since incorporation, treat that as the first thing to address — before a dispute, not after.