{"id":28824,"date":"2022-12-28T13:30:53","date_gmt":"2022-12-28T13:30:53","guid":{"rendered":"https:\/\/www.growthmentor.com\/location\/athens\/shareholders-agreement-copy\/"},"modified":"2023-01-18T19:52:15","modified_gmt":"2023-01-18T19:52:15","slug":"shareholders-agreement","status":"publish","type":"glossary","link":"https:\/\/www.growthmentor.com\/glossary\/shareholders-agreement\/","title":{"rendered":"Shareholder\u2019s Agreement"},"content":{"rendered":"\n

Definition of a Shareholder\u2019s Agreement<\/strong><\/h3>\n\n\n\n

The simplest definition of a shareholders\u2019 agreement is that it\u2019s a legally binding document that outlines the rights and obligations of a company\u2019s shareholders. It will typically also cover the governance and issuance of shares, the way that the business operates and the way that it will make decisions based upon shareholder feedback.<\/p>\n\n\n\n

Also called a stockholder\u2019s agreement, the purpose of a shareholder\u2019s agreement is to protect all parties, including both the company and the shareholders. It provides a legal basis against which any disputes can be arbitrated.<\/p>\n\n\n\n

The Goal of a Shareholder’s Agreement<\/h3>\n\n\n\n

The goal of a shareholder\u2019s agreement is to make sure that everyone is treated as fairly as possible. This includes minority shareholders, which are those with a relatively low number of shares who typically don\u2019t have much control over the way that the company operates.<\/p>\n\n\n\n

Shareholder\u2019s agreements usually outline how shares are distributed, sold and resold, and they typically also explain the way that the company is operated and how it makes major decisions such as whether to make an acquisition or to merge with another company. Many shareholder\u2019s agreements also specify how often board meetings take place and whether shareholders will have a say when it comes to the addition or removal of new board members and company directors.<\/p>\n\n\n\n

They may also include clauses that govern what happens in specific circumstances, such as what happens to shares if one of the shareholders dies. It\u2019s relatively common for shareholder\u2019s agreements to specify that if a shareholder sells their shares in the future, they\u2019re made available to existing shareholders before being issued to new investors.<\/p>\n\n\n\n

Shareholder\u2019s agreements also often include information on dividends so that investors have a written record of when they can expect to receive them. In some instances, they may include a competition clause that\u2019s designed to stop shareholders from creating a business that competes with the company.<\/p>\n\n\n\n

It can be a particularly good idea to create a shareholder\u2019s agreement if you\u2019re creating a company with family and friends or when taking on investment from those nearest and dearest to you. That way, any disputes can be solved by checking the shareholder\u2019s agreement and you minimize the risks of damaging your relationships.<\/p>\n\n\n\n

Shareholder\u2019s agreements can also be useful if a company is owned by two people who each own 50%. When that happens, the shareholder agreement can specify how disputes will be resolved. Otherwise, there\u2019s a risk that the two parties will end up at a stalemate and the company will no longer be able to operate. <\/p>\n\n\n\n

It\u2019s one of those important admin jobs where if all goes well, you\u2019ll never actually need it. But it\u2019s better to have and not need a shareholder\u2019s agreement than to not have one and then to wish that you did when everything goes wrong.<\/p>\n\n\n\n

When are shareholder\u2019s agreements created?<\/strong><\/h3>\n\n\n\n

The best option is usually to create the shareholder\u2019s agreement when the company is first created, because that can help potential investors to understand what they\u2019re getting into if they agree to invest funds in the company. However, it can be delayed, as long as the company creates the agreement ahead of issuing its first shares.<\/p>\n\n\n\n

Can shares be sold without a shareholder\u2019s agreement?<\/strong><\/h3>\n\n\n\n

They can, but it\u2019s a bad idea. The whole purpose of a shareholder\u2019s agreement is to help out if there\u2019s ever a dispute or a disagreement, and so creating one before you sell your first shares will help to reduce the potential for bad blood between a company and its investors.<\/p>\n\n\n\n

What do shareholder\u2019s agreements usually include?<\/strong><\/h3>\n\n\n\n

As well as an outline of the rights and expectations for shareholders and the way that the company is run, a shareholder\u2019s agreement will typically include information such as how many shares have been issued, when they were issued, how much they were issued for and the ownership percentage of different major shareholders.<\/p>\n\n\n\n

What is a tag-along provision?<\/strong><\/h3>\n\n\n\n

A tag-along provision is a common provision in shareholder\u2019s agreements that comes into play when someone offers to buy shares from a majority shareholder. If a tag-along provision is included in the shareholder\u2019s agreement, it means that the sale can\u2019t go ahead unless the same offer is made to all other shareholders. The goal is to make sure that minority shareholders are treated in the same way that majority shareholders are treated.<\/p>\n\n\n\n

Where can I find an example shareholder\u2019s agreement?<\/strong><\/h3>\n\n\n\n

You can download a free sample shareholder\u2019s agreement from LawDepot by clicking here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Definition of a Shareholder\u2019s Agreement The simplest definition of a shareholders\u2019 agreement is that it\u2019s a legally binding document that outlines the rights and obligations of a company\u2019s shareholders. It will typically also cover the governance and issuance of shares, the way that the business operates and the way that it will make decisions based […]<\/p>\n","protected":false},"author":46,"featured_media":0,"parent":0,"template":"","glossary-term":[],"acf":[],"yoast_head":"\nWhat is a Shareholder's Agreement? | GrowthMentor Glossary<\/title>\n<meta name=\"description\" content=\"A Shareholder's Agreement is a legally binding document that outlines the rights and obligations of a company\u2019s shareholders. Click here to learn more.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.growthmentor.com\/glossary\/shareholders-agreement\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is a Shareholder's Agreement? | GrowthMentor Glossary\" \/>\n<meta property=\"og:description\" content=\"A Shareholder's Agreement is a legally binding document that outlines the rights and obligations of a company\u2019s shareholders. Click here to learn more.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.growthmentor.com\/glossary\/shareholders-agreement\/\" \/>\n<meta property=\"og:site_name\" content=\"GrowthMentor\" \/>\n<meta property=\"article:modified_time\" content=\"2023-01-18T19:52:15+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.growthmentor.com\/glossary\/shareholders-agreement\/\",\"url\":\"https:\/\/www.growthmentor.com\/glossary\/shareholders-agreement\/\",\"name\":\"What is a Shareholder's Agreement? | GrowthMentor Glossary\",\"isPartOf\":{\"@id\":\"https:\/\/www.growthmentor.com\/#website\"},\"datePublished\":\"2022-12-28T13:30:53+00:00\",\"dateModified\":\"2023-01-18T19:52:15+00:00\",\"description\":\"A Shareholder's Agreement is a legally binding document that outlines the rights and obligations of a company\u2019s shareholders. Click here to learn more.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.growthmentor.com\/glossary\/shareholders-agreement\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.growthmentor.com\/glossary\/shareholders-agreement\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.growthmentor.com\/glossary\/shareholders-agreement\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.growthmentor.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Glossary\",\"item\":\"https:\/\/www.growthmentor.com\/glossary\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Shareholder\u2019s Agreement\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.growthmentor.com\/#website\",\"url\":\"https:\/\/www.growthmentor.com\/\",\"name\":\"GrowthMentor\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\/\/www.growthmentor.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.growthmentor.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.growthmentor.com\/#organization\",\"name\":\"GrowthMentor\",\"url\":\"https:\/\/www.growthmentor.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.growthmentor.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.growthmentor.com\/wp-content\/uploads\/2020\/08\/logo-white.svg\",\"contentUrl\":\"https:\/\/www.growthmentor.com\/wp-content\/uploads\/2020\/08\/logo-white.svg\",\"caption\":\"GrowthMentor\"},\"image\":{\"@id\":\"https:\/\/www.growthmentor.com\/#\/schema\/logo\/image\/\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"What is a Shareholder's Agreement? | GrowthMentor Glossary","description":"A Shareholder's Agreement is a legally binding document that outlines the rights and obligations of a company\u2019s shareholders. Click here to learn more.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.growthmentor.com\/glossary\/shareholders-agreement\/","og_locale":"en_US","og_type":"article","og_title":"What is a Shareholder's Agreement? | GrowthMentor Glossary","og_description":"A Shareholder's Agreement is a legally binding document that outlines the rights and obligations of a company\u2019s shareholders. Click here to learn more.","og_url":"https:\/\/www.growthmentor.com\/glossary\/shareholders-agreement\/","og_site_name":"GrowthMentor","article_modified_time":"2023-01-18T19:52:15+00:00","twitter_card":"summary_large_image","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.growthmentor.com\/glossary\/shareholders-agreement\/","url":"https:\/\/www.growthmentor.com\/glossary\/shareholders-agreement\/","name":"What is a Shareholder's Agreement? | GrowthMentor Glossary","isPartOf":{"@id":"https:\/\/www.growthmentor.com\/#website"},"datePublished":"2022-12-28T13:30:53+00:00","dateModified":"2023-01-18T19:52:15+00:00","description":"A Shareholder's Agreement is a legally binding document that outlines the rights and obligations of a company\u2019s shareholders. Click here to learn more.","breadcrumb":{"@id":"https:\/\/www.growthmentor.com\/glossary\/shareholders-agreement\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.growthmentor.com\/glossary\/shareholders-agreement\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.growthmentor.com\/glossary\/shareholders-agreement\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.growthmentor.com\/"},{"@type":"ListItem","position":2,"name":"Glossary","item":"https:\/\/www.growthmentor.com\/glossary\/"},{"@type":"ListItem","position":3,"name":"Shareholder\u2019s Agreement"}]},{"@type":"WebSite","@id":"https:\/\/www.growthmentor.com\/#website","url":"https:\/\/www.growthmentor.com\/","name":"GrowthMentor","description":"","publisher":{"@id":"https:\/\/www.growthmentor.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.growthmentor.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.growthmentor.com\/#organization","name":"GrowthMentor","url":"https:\/\/www.growthmentor.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.growthmentor.com\/#\/schema\/logo\/image\/","url":"https:\/\/www.growthmentor.com\/wp-content\/uploads\/2020\/08\/logo-white.svg","contentUrl":"https:\/\/www.growthmentor.com\/wp-content\/uploads\/2020\/08\/logo-white.svg","caption":"GrowthMentor"},"image":{"@id":"https:\/\/www.growthmentor.com\/#\/schema\/logo\/image\/"}}]}},"_links":{"self":[{"href":"https:\/\/www.growthmentor.com\/wp-json\/wp\/v2\/glossary\/28824"}],"collection":[{"href":"https:\/\/www.growthmentor.com\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/www.growthmentor.com\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/www.growthmentor.com\/wp-json\/wp\/v2\/users\/46"}],"wp:attachment":[{"href":"https:\/\/www.growthmentor.com\/wp-json\/wp\/v2\/media?parent=28824"}],"wp:term":[{"taxonomy":"glossary-term","embeddable":true,"href":"https:\/\/www.growthmentor.com\/wp-json\/wp\/v2\/glossary-term?post=28824"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}