What is a Shareholder Agreement?
A shareholder’s agreement formalizes the arrangement between the shareholders of a company and should provide information and guidance on the following corporate matters:
- Governance Management
- Financing Obligations
- Dispute resolution mechanism
- Transfers of shares/Dissolution/Wind-Up
What is the Purpose of a Shareholder Agreement?
A shareholder agreement can have multiple uses. It is very beneficial when a corporation is closely-integrated and there are only few shareholders.
Typically a shareholder agreement would include:
- Rights related to the sale, issuance or distribution of shares
- Highlight rights of other parties involved
- Processes of buying or selling shares
- The death or retirement of a current shareholder
- Establish board of directors (if applicable)
- Process of approving new shareholders, as existing shareholders
At Smith, Sykes, Leeper & Tunstall LLP, our experienced staff can assist you in the development and implementation of your shareholders’ agreement.