A Shareholder Agreement is, in essence, a contract between the shareholders of a corporation which defines the rights and duties of each shareholder to the corporation and to each other.
Shareholder agreements can, among other things, detail the proper functioning of a corporation in the event that a shareholder dies (many times, life insurance is used to fund a company's purchase of shares), becomes disabled, attempts to voluntarily sell or transfer his/her shares, is forced to convey some or all of his/her ownership interest (for example, through bankruptcy). Additionally, shareholders can agree amongst themselves in these agreements as to the voting of directors, officers,responsibilities of shareholders,business working etc.
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• The Company Structure
• The appointment and removal of directors
• Shareholding restrictions and the transfer of shares
• Resolution of deadlock situations
• Addition of New Shareholders
• Restrictions on the activities of the Company
• Duty of Shareholder to act bona fide
• Business Plan of the Company
• Access to records and financial documents
• Dispute Resolution and applicable law