A shareholders' agreement, also called a stockholders’ agreement, is an arrangement among a company's shareholders that describes how the company should be operated and outlines shareholders' rights and obligations. The agreement also includes information on the management of the company and privileges and protection of shareholders.
Every company raises its capital through shares plowed in by shareholders. Therefore, shareholder plays a major role in the functioning of a company and their relationships have to be guided and overlooked. A formal document that lays down the terms and conditions that shareholders comply with the company is what constitutes a Shareholders Agreement.
Why Choose Tax Assist Shareholders Agreement?
This organization comprises of expert legal professionals, who use their expertise will draft your shareholder’s agreement that shall cover all the legal requirements and needs of the parties. The experience and the knowledge that our professionals hold can help you in including clauses in the agreement that shall effectively describe the relationship between the parties and company as well as avoid confusion or difficulties in the future.
Advantages of Shareholders Agreement
The agreement involves a detailed description of the nature of work and relationships among shareholders and with the company that will avoid confusion.
Guards the Parties:
The parties express their will, rights, and duties in an agreement which reduces the scope of disputes between the parties in the future.
It acts as evidence that expresses the duties and rights which the parties have agreed on.
Scope of Confidentiality:
The Agreement involves clauses that state the compliance with any confidentiality that the parties may prescribe in their contract.
Intellectual Property Rights:
The ownership rights and usage rights of trademark or trade name (if any) will be clearly distinguished in the shareholder's agreement that will establish the rights of parties very clear.
Documents Required for Shareholder Agreement
- Name and details of parties
- Date of the agreement
- Purpose of the agreement
- Distribution of shares
- Management and control
- Shareholding (Before and After)
- Confidentiality Clause
- Director’s loan (if any)
- Penalties and remedy for non-compliance
- Provision for transfer of shares
- Shareholder's rights and duties during the dissolution of the company
- Signatures of parties
Frequently Asked Questions
What is Agreement of Shareholders?
It is an agreement made between the shareholders of the company describing their relationship among them and the company.
Why Agreement of Shareholder is Important?
It addresses many key issues that the company may face in the future and brings clarity to what, when and how the shareholders must act which will allow smooth management of the company.
What does a Agreement of Shareholders include?
The agreement includes every rights and responsibility held by the shareholders among them and with the company during their live relationship with the company.