What is a shareholder agreement?
A shareholder agreement is a formal legal contract entered into by a company's shareholders, setting out their respective rights, duties, and obligations, as well as provisions governing the management and operation of the company.
When should a shareholder agreement be signed?
Ideally, a shareholder agreement should be executed at the time of incorporation or prior to the issuance of equity to new shareholders.
Do all companies need a shareholder agreement?
While not a statutory requirement, it is strongly advised—particularly for private companies with multiple shareholders—to have a shareholder agreement in place to establish clear governance and mitigate potential disputes.
Is a shareholder agreement legally binding?
Yes. A shareholder agreement constitutes a legally enforceable contract among the signatory shareholders.
Are shareholder agreements confidential?
Yes. Shareholder agreements are private documents and are not typically lodged with the corporate registry, in contrast to the articles of association.
