A shareholders' agreement can represent the key to predictability in the governance of a company. It constitutes a binding agreement between the company's shareholders, and acts as a supplement to the company's articles of association and any other agreements on shares between different parties.
The shareholders' agreement typically deals with general provisions relating to future events. It provides a pre-defined direction for handling different situations, which can often be more appropriate than trying to resolve them after the fact. In short, a shareholders' agreement can prevent potential conflicts and reduce legal costs.
A well-drafted shareholders' agreement acts as an insurance against conflicts. It becomes particularly necessary when there is a need to regulate relationships between shareholders beyond what the Limited Liability Companies Act and the articles of association cover. The articles of association primarily regulate the company's legal relationships, while the shareholders' agreement focuses on the shareholders' mutual relationships - only for those shareholders who are party to the agreement.
The shareholders' agreement is typically entered into between all of the company's shareholders, but it is also possible for selected shareholders to participate in a shareholders' cooperation, possibly with the involvement of third parties. However, the agreement is only binding for those parties who are co-signatories, while the articles of association apply to all shareholders and are publicly available through the company register.
The shareholders' agreement becomes an important governance instrument when cooperation between shareholders is critical. It is particularly valuable in situations with few owners, where the legal regulations do not offer sufficient solutions. Examples of relevant situations include companies where you want the shares to be held internally, when establishing active owners in start-up phases, potential acquisitions, and when transferring shares where pricing can be challenging.
There is no standard for an optimal shareholder agreement, as each situation is unique. The agreement can cover various aspects, including board composition, decision-making and especially the transfer of shares. In terms of transfer, the agreement may regulate aspects such as pre-emption rights, approval procedures, pricing, restrictions on external buyers, co-sale rights and obligations, and other relevant restrictions.
Remember that shareholder agreement templates found online may not fit your situation exactly. Think carefully about what is important to you and the shareholder community in different scenarios. Understand the content of the shareholder agreement and the potential consequences of different outcomes. Shareholder agreements should be tailored to meet the specific needs of the company, and it is advisable to seek advice to ensure the agreement is robust and compliant with applicable laws.
