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Corporate and Commercial: What is a shareholders’ agreement?

January 1st 2021

This is a contract between the shareholders in a company, setting out how the company will be owned and run. There is no legal requirement to have a shareholders’ agreement, but they can cover useful areas such as how decisions will be made, dividend payments, who shares can be transferred to (along with how they will be valued) and how funding will be raised. Another advantage is that, unlike articles of association (which must be filed at Companies House and so are publicly available), a shareholders’ agreement is a private document between the shareholders which cannot be viewed by members of the public.

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