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What are the key elements of a shareholder agreement

Posted by jobseeker Krish Chandna | Approved
Answers (1)

1. Shareholding Structure
- Details of each shareholder’s shareholding percentage.
- Capital contribution and future funding obligations.

2. Rights and Obligations of Shareholders
- Voting rights, dividend rights, and duties.
- Special rights for majority or minority shareholders.

3. Board Composition and Management
- Appointment of directors by shareholders.
- Decision-making powers and quorum requirements.

4. Transfer of Shares
- Conditions for selling shares.
- Right of First Refusal (ROFR), Tag-along, and Drag-along rights.

5. Exit Options
- Provisions for IPO, buyback, or third-party sale.
- Timeline and process for investor exit.

6. Dispute Resolution
- Mechanism for resolving disputes (e.g., arbitration, courts).
- Jurisdiction and governing law.

7. Confidentiality
- Obligation to protect the company’s sensitive information.

8. Non-compete and Non-solicit Clauses
- Restrictions on shareholders from competing with the company or soliciting employees.

9. Deadlock Resolution
- Steps to resolve disagreements where parties are equally divided.

10. Termination Clause
- Conditions under which the agreement may end or be amended.

Answered by jobseeker Vipra | Approved

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