A Shareholders’ Agreement is a binding contract defining primarily the relationship among the shareholders. It includes details of ownership of shares, rights, obligations, privileges and organization management. It may also comprise the Company’s Articles or by-laws.
Benefits of Shareholders’ Agreement
Protection of Minority Shareholders
The biggest advantage of a Shareholder Agreement is it protects the minority shareholders by requiring unanimous approval for important decisions.
Shareholders’ Agreement does not have to be registered with the Registrar of Companies. Hence, the same will not be available for public and will purely be an internal document, available only for the shareholders.
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