What Is a Shareholders Agreement?

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What Is a Shareholders Agreement?

A shareholders’ agreement is a legal agreement between the shareholders or stockholders in a company. The agreement regulates the relationship, rights, and obligations of the shareholders. The shareholders’ agreement often supplements the incorporation documents and bylaws of the company. Many companies use them due to many advantages such as:

Shareholders’ agreements are sometimes known as “stockholders’ agreements.”

What Do Shareholders’ Agreements Cover?

Shareholders’ agreements are specifically tailored to the needs of the company and the shareholders. They may cover a wide range of legal issues and topics, and are crafted through careful negotiation. Shareholders’ agreements may cover subject matter such as:

As mentioned, shareholders’ or stockholders’ agreements often vary drastically from company to company. They are also subject to frequent revisions and re-workings.

What Are Some Common Shareholders’ Agreement Disputes and Remedies?

Like any contractual document, shareholder agreements can be the focus of various legal disputes and lawsuits. Common shareholders’ agreement disputes include:

Remedies for a shareholders’ agreement dispute can often involve a monetary damages award. This is meant to help compensate a non-breaching party for losses caused by an agreement violation. In many cases, the shareholders’ agreement itself may contain terms that indicate how disputes are to be resolved, such as by lawsuit or arbitration. In such cases, the terms of the agreement will be followed when it comes to dispute remedies.

Should I Hire a Lawyer for Help with a Shareholders’ Agreement?

Shareholder or stockholders’ agreements can often be complex and may involve much negotiating. They can also be highly specific and require careful attention to detail when drafting and reviewing them. You may need to hire a business law attorney if you need assistance with any shareholder agreement issues. Your lawyer can help with editing, reviewing, and negotiating an agreement. Also, if you need to file a lawsuit over a shareholder dispute, your lawyer can provide you with professional representation during court proceedings.

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Last Modified: 06-03-2015 04:04 PM PDT

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