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 
• Disability/Bankruptcy/Retirement/Death 
• 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: 

1. Rights related to the sale, issuance or distribution of shares 
2. Highlight rights of other parties involved
3. Processes of buying or selling shares
4. The death or retirement of a current shareholder 
5. Establish board of directors (if applicable) 
6. 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.