Shareholder Agreement
From LawDepot Law Library
Definition of "Shareholder Agreement"
A Shareholder Agreement is an agreement between all or some of the shareholders (or stockholders) of a corporation. This contract establishes the rights of shareholders and the duties and powers of the Board of Directors and management. A Shareholders' Agreement is very beneficial when the Corporation is closely-held or there are only a few shareholders. Also known as a stockholder agreement. A typical shareholders' agreement might do some or all of the following:
- determine rights related to the sale, issuance or subsequent distribution of shares (e.g. rights of first refusal, piggyback rights and pre-emptive rights);
- set out the rights and duties of the officers and other management;
- create options to buy or sell the shares (a shotgun clause);
- determine what will happen in case of death, retirement, etc., of a shareholder (with the value of the shares to be calculated according to a certain formula);
- establish the number of Directors on the Board and their duties;
- provide existing shareholders with the right to approve future shareholders.
Shareholder Agreement Resources
- Shareholder Agreement FAQ - Provides general information as well as information specific to LawDepot's automated Shareholder Agreement form.
- LawDepot's Automated Shareholder Agreement
- Corporate Forms FAQ - Provides general information as well as information specific to LawDepot's automated corporate forms.
- Business Types FAQ - Provides general information about various business types.
