Salient and Consequential Features of a Shareholder Agreement[2]

A shareholders’ agreement is a contract that regulates the relationship between the shareholders and the corporation. The agreement will detail what models or forms which the corporation should run and outline and the basic rights and obligations of the shareholders. In practice, the shareholders’ agreement plays an important role in a close corporation but not public companies. Commonly the shareholders’ agreement
regulates issues like voting during shareholders’ meetings, buying or selling company’s shares, the corporation's articles of incorporation and bylaws, as well as the selection procedure for the board members of the corporation.