When two or more people decide to be involved in business together, the Shareholders Agreement should be one of the first documents prepared and signed.

A Shareholders Agreement deals with how the company will be run and the rights, responsibilities and obligations of the shareholders. A well drafted Shareholders Agreement is important to ensure that all shareholders are on the same page, so as to avoid future disputes.

What does a Shareholders Agreement include?

At minimum it covers:

• Appointment and removal of directors
• Funding
• Distributions
• Auditors and financial year end
• Disposal of shares
• Pre-emptive rights
• Come along and tag along
• Deemed offer
• Regulatory approvals
• Relationship between the company and its shareholders
• Confidentiality
• Legal matters