What Are the Key Provisions in a Shareholder Agreement?
A comprehensive shareholder agreement typically includes the following key provisions:
1. Shareholder Rights and Obligations: Details the rights and responsibilities of each shareholder. 2. Decision-Making Process: Outlines how decisions are made, including voting rights and the required majority for various types of decisions. 3. Transfer of Shares: Specifies the conditions under which shares can be transferred, sold, or inherited. 4. Dividend Policy: Defines how profits will be distributed among shareholders. 5. Dispute Resolution: Includes mechanisms for resolving disputes, such as mediation or arbitration. 6. Non-Compete Clauses: Prevents shareholders from engaging in businesses that compete with the company.